Tags: Altman | Greece | Euro | europe

Roger Altman: Greece Should Realize It’s Best to Stick With Euro

Wednesday, 23 May 2012 11:12 AM

Europe could handle a Greek exit from the eurozone but Greece would suffer dearly, says Roger Altman, chairman at Evercore Partners and former Deputy Treasury Secretary.

Greece is headed for parliamentary elections on June 17, and widespread anger at painful austerity measures such as layoffs and tax hikes has boosted popularity for the leftist Syriza political coalition, whose leaders have called for an end to austerity.

Past Greek administrations agreed to austerity measures in exchange for hundreds of billions of dollars in bailout money to work through the debt crisis, although scrapping belt-tightening policies could cut off the flow of that rescue funding and steer Greece out of the currency zone.

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"In theory, Greece should not exit the eurozone because that would usher in a very dark period in Greece where no one would lend to country. The state couldn't meet its payroll, it couldn't make all of its social benefit payments," Altman tells CNBC.

"The eurozone may be able to allow Greece to go, but I'm just pointing out from a Greece's point of view it does not make sense to exit the eurozone, and I am still skeptical that the Greek leaders themselves in the Greek political system will choose to go that way."

Other high-profile market watchers think in the end, Athens will stick with the euro.

"If you really put a gun to my head, I think Greece stays in," Goldman Sachs Asset Management Chairman Jim O'Neill tells Bloomberg TV, adding Greece's bailout arrangers — the European Commission, the European Central Bank and the International Monetary Fund — will likely ease up on austerity demands.

"They have to stick to the commitments they've signed up to, but in order to make it more tolerable, there will be some incentives."

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Wednesday, 23 May 2012 11:12 AM
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