Greece 'incapable' of staying in eurozone

Greece 'incapable' of staying in eurozone

A Greek exit from the eurozone is more than likely, says Carnegie Asset Management.


Speaking to InvestorDaily, Carnegie Asset Management portfolio manager Morten Springborg said he does not see Greece staying in the eurozone: “[Greece] is simply incapable of living up to the requirements,” he said.

On Friday, Greece submitted a list of 18 structural reforms to its creditors – the European Central Bank (ECB), the International Monetary Fund (IMF) and the EU – in order to access approximately €7 billion in financial aid.

Speaking to the UK's The Guardian on the weekend, former Greek finance minister Stefanos Manos said, “It is clear we are reaching the end and very soon won’t be able to pay.”

Greece is widely expected to default on April 9 when its €450 million repayment to the IMF is due.

Under the anti-austerity Syrzia party, the country is adopting desperate measures such as raiding EU subsidies directed at farmers to service its debt and pay salaries and pensions.

“They are scraping the bottom of the barrel for everything they can find,” said Mr Manos, quoted in The Guardian.

However, Mr Springborg noted that Greece’s exit will be beneficial to the eurozone.

Whilst a Grexit will cause volatility, “it’s not an existential threat to the eurozone”, he said.

Greece’s creditors are yet to approve the financial aid package, but have stated that more funding must be accompanied by austerity measures – an approach that is at odds with the leftist Syrzia party.

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