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Tom Hutchinson: Greek Default Will Be Disaster for Athens, Not Rest of World

By    |   Tuesday, 30 June 2015 01:19 PM

A Greek debt default and exit from the eurozone would be a disaster for Greece but not the rest of the world, Tom Hutchinson, senior financial editor of the High Income Factor Newsletter, told Newsmax TV.

“Greece's economy is no big deal,” he told “Newsmax Now.” “The reason we're paying so much attention to this is what it represents,” he said, saying a Grexit (Greek exit from the euro zone) could foreshadow other vulnerability in weaker European countries.

“It's like an interest rate hike. As soon as the Fed raises interest rates, speculation begins about when the next one is,” he said.

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“I don't think it'll be a disaster for the rest of the world, it'll be a disaster for Greece,” he said.

Greece is poised to become the first developed nation to miss a debt repayment to the International Monetary Fund, as Greece sinks deeper into a financial emergency that has forced it put a nationwide lockdown on money withdrawals, the Associated Press reported.

The crisis worsened over the weekend after Prime Minister Alexis Tsipras called a referendum for Sunday on creditors' proposals for reforms in return for bailout loans. That increased fears the country could soon fall out of the euro currency bloc and Greeks rushed to pull money out of ATMS. Tsipras is advocating a "no" vote.

Greece is expected to miss a 1.6 billion euro ($1.9 billion) debt repayment to the IMF due Tuesday. If Greece doesn't pay, it will be officially in arrears and will no longer have access to funding from the body until it pays its debt. This, IMF chief Christine Lagarde told the BBC last week, has "never happened in the case of an advanced economy."

Meanwhile, Hutchinson said Europeans also fear any ripple effect from the Greek drama.

“They think they can absorb Greece leaving, but they don't really know for sure and nobody really wants to find out,” he said.

(The Associated Press and Reuters contributed to this article).

About Tom Hutchinson
Tom Hutchinson is a member of the Newsmax Financial Brain Trust. Click Here to read more of his articles. He is also the editor of The High Income Factor. Discover more by Clicking Here Now.

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A Greek debt default and exit from the eurozone would be a disaster for Greece but not the rest of the world, Tom Hutchinson, senior financial editor of the High Income Factor Newsletter, told Newsmax TV.
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Tuesday, 30 June 2015 01:19 PM
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