Oliver’s Insights – Greece and Europe – what’s the risk of a disorderly default and euro break-up?

This note looks at the risk of a disorderly Greek default and euro break-up and what the impact might be. The key points are as follows:

• Logic argues against a Eurozone break-up given the costs to countries that exit. Nevertheless, a disorderly Greek default is a high risk, but at least Europe is becoming better at being able to deal with it, particularly if it occurs after new bailout funds are in place from mid-year.

• So while Greek issues are unlikely to go away any time soon and remain a source of volatility, they are unlikely to pose as big a threat to the global economy and investment markets as was feared last year.

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