Nick Dewhirst, Director at Integral Capital Management, believes that Greece will leave the European single currency on June 18 if a populist Government is formed after the country’s second round of elections. The opinion comes as the crisis surrounding the Mediterranean nation deepens as political paralysis grips the country. The comments were made on CNBC today.
Greece will hold a second round of elections on June 17 after the country’s politicians failed to form a government in the first elections. If the new vote manages to bring in a majority of politicians who are against the austerity measures imposed by the European Union and able to form a coalition it is predicted they will attempt to make a break with the single currency.
Such a move would allow the Greek government to inflate their way out of their massive debt and return to a reasonable level of sovereign burden.
Dewhirst was not flattering in his characterization of the Greek governments that brought this crisis to a head or of the Greek people that allowed it to happen. He labelled the Greek people “cheaters” in the Euro Zone. The manager said that “Greek society is built on cheating and scheming” and added that finally getting caught was inevitable for the country.
Whether his harsh analysis of Greek society is to be taken for granted Dewhirst goes on to outline what is, in general, a popular opinion of a possible Greek exit. He thinks the country leaving the Eurozone is the best possible strategy for everyone involved.
A Greece exit will remove that country’s problems from the Union’s books but it could leave chaos in the remaining badly performing countries. Spain, Portugal, Ital and Ireland are all still sagging under great burdens of debt. If Greece is to leave the Union it could lead to steady erosion as other countries see a feasible way out that involves a much lower level of unpopular austerity.
If a populist government is formed after the country’s elections there very well could be an exit from the single country on June 18. There are obstacles of course. Those include the difficulty of forming a Government in the fractured country and the reactions of European officials who may try and force a different outcome in order to preserve European stability.
Europe is at the very depths of its crisis and has languished there for years now. A status quo fix does not seem forthcoming as the Union heads for further chaos.