Greek euro exit would devastate European banks - analyst

Monday, 18 June 2012 09:32

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Peter Bild, financial writer, believes a Greek exit from the currency union would cause huge legal complications. “It’s never happened like this before, that a very, very tightly knit union, a currency union, has ever actually broken up. The real fear is that there could be immense legal battles going on for years and years between banks, between debtors and lenders, simply because nobody knows exactly in what currency the debts that are being run up would have to be repaid. Those in Greece would perhaps be repaid with a far devalued new drachma, but that of course could put the banks in Germany and France in terrific trouble. And so the real consequences are so enormous, potentially enormous, that nobody really wants to contemplate them."

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