With financial markets across Europe continuing to be pressured by speculation of a Greek sovereign debt default, the chorus of investors and businesspeople calling for a default has increased considerably.
One individual with extensive knowledge of sovereign debt crises – having served as the head of Argentina’s central bank following its $95 billion default in 2001 – is Mario Blejer. In an interview in Buenos Aires, via Bloomberg, Blejer stated that “This debt is unpayable. Greece should default, and default big. A small default is worse than a big default and also worse than no default.”
Blejer – who also served as adviser to Bank of England Governor Mervyn King between 2003 and 2008 - went on to say that ““It’s totally ridiculous what is going on. If you assume that these countries do everything that is in the program, they do all these adjustments and privatizations, at the end of 2012 debt-to-GDP will be bigger than this year.”
“It doesn’t make sense to give money to Greece so Greece can pay the Germans back,” Blejer continued. “All these projects, all the euro projects don’t make sense economically.”
Another individual with extensive experience in the European banking system – Standard Chartered CEO Gerard Lyons – stated in Sky News interview that a Greek default is “inevitable.” Although Greece’s exit from the euro may not occur within the next two years, according to Lyons, it is “quite likely at some stage.”