Greece’s gross domestic product would have been cut in half if the financial crisis had been followed by a Greek exit from the eurozone in 2015, according to the head of the European Stability Mechanism, Klaus Regling.
The German official said the ESM’s calculations showed that Grexit would have reduced Greece’s GDP by a quarter, on top of the 25 percent that had already vanished due to the crisis. That would mean the cost of Grexit in GDP terms would amount to some 50 billion euros. “This cannot be a target to seek,” Regling commented in an interview with Swiss newspaper Neue Zuercher Zeitung.
He added that such a development would have altered the character of the monetary union, and that profiteering would have been rife each time a problem arose.
In the same interview the ESM chief noted that Greece is now a positive example, citing SYRIZA’s ejection from office and the election of a reformist government. As he said, for the last three years the country has shown a budget surplus, unemployment has dropped by more than 10 percentage points since its peak in 2013, and the people “have ousted a populist government and chosen a reform-minded one.”