De Gucht says Greek eurozone exit ‘would be painful’

European commissioner for trade says ‘Grexit’ would not mean the end of the euro.
Karel De Gucht, the European commissioner for trade, in an interview with the Flemish newspaper De Standaard, has conceded the possibility that Greece might leave the eurozone.

He said that if Greece did leave, it would not be a disaster for the European Union, though the consequences would be painful. “How much that might cost the Belgian budget, I don’t know, but it will cost. What I am quite relaxed about is that there will be no contagion: a Greek exit does not mean the end of the euro,” the commissioner said.

“If there is an exit, the mess in Greece will be enormous,” he said. “The budget deficit will not disappear. At the moment, it can be financed – with much difficulty – through the IMF and Europe. But then, no one will lend a cent. C’est fini. That means that after a bit you cannot pay your civil servants and cannot pay out your pensions. You are quite stuck. The only thing you can do is let your central bank print money, and then you get hyperinflation. That will cause such a cataclysm that in the other countires which are currently under pressure, no one will follow suit.”

De Gucht said that Greece had no alternative but to execute the budget plan agreed with Europe.  But that could only happen if the Greek people behaved rationally.

He said he did not know what the outcome of the next Greek elections would be [an election has been called for 17 June], but he believed that Greece would remain in the single currency.