A “disorderly” restructuring of the euro zone could unfold should Greek voters reject the austerity measures their government agreed to in return for financial aid, Canadian Finance Minister Jim Flaherty said Monday.
In a series of interviews with Canadian broadcasters in the late afternoon, Flaherty said there are also “serious” problems in Spain, with the government in Madrid being forced to nationalize one of its big lenders; and underlying structural challenges in Italy. “And it is not clear that the governments in those countries are going to be able to manage what needs to be done given the unwillingness of many voters to go along with” the economic reform required, Flaherty said.
“The whole future of the euro zone is up for grabs,” he said, noting Europe was mired in a recession.
Still, Flaherty added that an exit by Greece from the euro zone–a topic top European policymakers are starting to broach–would represent a “relatively minor” risk to Canada.
Separately, he said Canada’s relatively strong currency reflects the country’s solid economic and fiscal fundamentals, “which are among the best in the world.”
(source: Dow Jones)
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