Harvard University economist Kenneth Rogoff said Greece will probably default “hugely,” and it’s not unthinkable that the country will leave the euro area.
“Countries have defaulted many, many times in the past,” Rogoff said in an interview on BBC Radio 4 today. “Exiting the euro is clearly not as routine, but it’s certainly not unthinkable.”
“I think the odds they will be gone from the euro in a few years are very high,” he said. “Really part of the reason they’re staying in is they’re being bribed not to default.”
If European leaders’ plan is “just to build a firewall, it’s not going to work. They need a fundamental restructuring of the euro” with a fiscal union and common regulatory rules and it needs to happen soon, he said.