ECONOMY

Euro exit would be ‘very costly’ for Greece, IMF economist says

An exit from the eurozone would be “very costly” for Greece, International Monetary Fund chief economist Olivier Blanchard has warned.

“We are working with the Greeks to try and find an acceptable compromise, a program which makes sense to both sides,” Blanchard told Bloomberg on the sidelines of the World Bank-IMF 2015 Spring Meetings in Washington Tuesday.

“If it did happen and there was an accident – which could happen – then for Greece it would be very very costly,” Blanchard said adding that the rest of the eurozone was in much better shape than it was in 2010 to handle the consequences of a Greek euro exit.

If that were to happen, Blanchard added, then the remaining members of the eurozone should try “to go further in the direction of fiscal union and political union to send a very strong signal that Greece is the exception, not the rule.”