‘Catastrophic’ for Greece to leave euro – Varoufakis

Greek Finance Minister Yanis Varoufakis says it would be “catastrophic” if Greece left the euro, predicting it would herald “the beginning of the end of the common currency project”.

LONDON, ENGLAND, UNITED KINGDOM (MAY 24, 2015) (BBC ANDREW MARR SHOW) – It would be “catastrophic” if Greece left the euro, Greek Finance Minister Yanis Varoufakis said in an interview on Sunday (May 24).

Asked what would happen if Greece went back to its pre-euro currency, the drachma, Varoufakis said such a move would spell disaster for the Greek economy.

“It would be, it would be, because once you are in a monetary union, getting out of it is indeed, as you put it, catastrophic. We don’t have a currency peg to the euro, we just have the euro. It is like having a foreign currency as your currency. Trying to get out of it is tantamount to announcing in advance a devaluation ten months in advance, it would be a disaster. But you see it would be a disaster for everyone involved, it would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end of the common currency project in Europe. Whatever some analysts may be saying about firewalls, these firewalls won’t last long once you put into investors’ minds the idea that the euro zone is not indivisible. It will be only a matter of time before the whole thing begins to unravel,” he told the BBC’s Andrew Marr show.

He also said Greece had made “enormous strides” at reaching a deal with its international lenders to avert bankruptcy.

But a senior Greek ruling party lawmaker said on Wednesday (May 20) that Athens could not make a payment to the International Monetary Fund due on June 5 unless foreign lenders disbursed more aid, the latest warning from Athens that it is on the verge of default.

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