Greece should stay in the eurozone, says top economist

Monday 21st November 2011, 2:30PM GMT.

Han de Jong, chief economist at ABN Amro Bank, speaking at the recent CISI seminar at the OGH Hotel.

A TOP European economist has suggested that Greece should not be kicked out of the euro as Europe struggles to deal with the sovereign debt crisis.

Han de Jong, chief economist at ABN Amro Bank, said in a presentation to the Chartered Institute for Securities and Investment, that Europe was at a T-junction, facing alternatives of stronger integration and even fiscal union or the break up of the euro – he rated the likelihood of the latter at 5-10%.

‘I personally think it’s not a great idea to be kicking countries out,’ he said. ‘We have problems we need to address but pushing countries out will not solve those problems.

‘It will be painful for Greece but it would be more painful to leave the eurozone. The new currency would be devalued and the country would fall into a deep recession as imports rise substantially in value.’

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1
Mark

November 25, 2011 at 4:20 pm

I am no economist and do not represent myself as an expert in this area, however I wonder if we would be in a worse off position now if Greece was cut loose 2 or 3 years ago and let them go bankrupt, it seems to me that the infection has spread across all EU members with Germany now having issues with their Bonds and now the Banks looking at Japan with worries. If we would have let the countries go into recession / depression in 2008 rather than spending Billions / Trillions on proping up the banks who caused these issues the Governments would now have the fire power to drag us out of this. I know bankruptcy is not good but sometimes you have to draw line and say enough, the people cannot carry the burden of the few

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2
Dave Stevens

November 25, 2011 at 4:31 pm

Greece should never have been allowed in the Euro in the first place. It did not meet any of the convergence tests. However with the help of, surprise surprise, Goldman Sachs it was able to do some very nifty off balance sheet scams that allowed it to claim that it did the meet the tests. Now this tiny little economy could drag the industrialised world into a depression. Greece by being outside the Euro could allow it to devalue where what little industry it has becomes competitive. The Euro is a magical thinking project and was never a natural currency area. This economist seems to be indulging in similar emotional statements. And if he’s got any creditability he’d know that Greece is already in a deep recession.

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