A Greek exit from the euro zone could trigger a global economic crisis of dire proportions and must be avoided at all costs, a respected German think tank said in a study published on Wednesday.
“A Greek exit from the euro carries the risk of a European and even international conflagration and could trigger a global economic crisis,” Bertelsmann Foundation said, citing the study it commissioned from Prognos AG.
Greece’s departure would entail costs for the country, already in its fifth year of recession, totalling 164 billion euros, or 14,300 euros per capita, until 2020, said the study, which ran a cost analysis of various scenarios.
A ‘Grexit’ would create pressure for the other heavily indebted southern European countries – Portugal, Spain and even Italy – to leave the common currency, a development that it said would threaten “a dramatic international recession”.
“The 42 most important economies would suffer total economic losses of 17.2 trillion euros (in that worst case scenario),” the think tank said.
“In the current situation now we absolutely have to prevent the eruption of a conflagration,” said Aart de Geus, chairman of Bertelsmann Foundation.
(source: Reuters)
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