The periphery scenario keeps coming back. On another note, this isn’t the first time warning trumpets have been sounded over Spain or Italy. You can find more information on them HERE and HERE. And while we’re at it, lets not forget about our friends in France, either.
“As long as it’s just Greece, then I think the consequences for the United States will be very limited, and that’s because the US market already have factored in, that they’ve priced in a high probability of Greek exit,” Institute for Economic Affairs Deputy Editorial Director Richard Wellings in London said on Thursday.
The big danger obviously is Spain and Italy, he added because “they’re such huge countries, particularly Italy has got such enormous debt that could potentially destabilize the whole global financial system.”
Center for Economic and Policy Research Co-Director Mark Weisbrot agreed that a Grexit might be successfully managed, but it could set off far more serious repercussions.
“For the United States and the global economy, it’s difficult to predict the impact because a lot would depend on the response of the ECB [European Central Bank],” Weisbrot said. “If [the ECB response] is inadequate, it could cause a serious international financial crisis.”
The European Union “could probably live with Greece leaving like a small and peripheral country,” Wellings stated.
However, Wellings concluded, European Union policy makers would be very reluctant to let some of the bigger nations like Spain and Italy leave the Eurozone.
Full article: Eurozone May Survive Grexit, But Italy, Spain Exposed to Increased Risk (Sputnik)