Many are worried that Greece will leave the Eurozone if the country’s anti-austerity Syriza Party wins the national election on Jan. 25. Jack Barton reported this story from Brussels.
The country’s opposition Syriza Party is leading pre-election polls with its pledge to renegotiate the country’s bailout, worth about $286 billion. In 2012, Eurozone members agreed to hundreds of billions in rescue funding for Greece to avert a chaotic default in its debt.
Possible Greek exit from Eurozone prompts global worriesMany are worried that Greece will leave the Eurozone if the country's anti-austerity Syriza Party wins the national election on Jan. 25. Jack Barton reported this story from Brussels.
“If there is an agreement on a slight cut in the debt, probably nothing much will happen, but of course if they decide to play [hard] ball and they want a real serious debt cut, and want to get rid of all of the debt, then this probably would trigger an exit,” Guntram Wolff, director of the European think tank Bruegel said.
The Eurozone’s biggest economy Germany has signaled it would accept what’s being called a “Grexit” from the Euro.
It was recently revealed that in 2011 Berlin drew up plans to have Greece kicked out of the Eurozone. German Chancellor Angela Merkel and her team changed course after it became clear the much larger economies of Spain and Italy would be engulfed by the loss.
A Greek exit would cost other countries tens of billions, even though the bloc is now in much better shape to absorb the blow.
Greece has already undergone an internal devaluation and the Syriza Party insists it want to keep the Euro.
Many analysts expect another uniquely European compromise in which everyone claims victory.
“Nobody with political responsibility in Germany or in Brussels or most other countries would like Greece to exit the Euro, because everyone knows the political costs would be very considerable indeed,” Daniel Gros, director of Centre for European Policy Studies said.
That effort may not help the European Central Bank, which had signaled its intention to boost the bloc’s economy with a massive bond-buying program later this month.
Anthony Chan of JP Morgan Chase discusses impact of possible ‘Grexit’
CCTV America’s Michelle Makori interviewed Anthony Chan, managing director and chief economist at investment bank JP Morgan Chase about a possible “Grexit” from the Eurozone and how it would affect global economies.