Furman: Grexit could mean major damage for world economy
Jason Furman, the chairman of the White House Council of Economic Affairs, gave an interview to Reuters today, where he said that a Greek Exit from the euro would have high-level risks for the global economy and that no one should be under the impression that the markets have fully taken into account this occurrence.
The comments by Jason Furman in an interview with Reuters in Berlin are among the strongest by a senior US official and are at odds with those of German Finance Minister Wolfgang Schaeuble, who told an audience in New York last week that contagion risks from a so-called "Grexit" were limited.
"A Greek exit would not just be bad for the Greek economy, it would be taking a very large and unnecessary risk with the global economy just when a lot of things are starting to go right," Furman said.
Growing concerns that Greece could run out of cash, default on its debt and eventually leave the single currency bloc have hit Greek markets and weighed on the euro.
But the country's financial woes have not had a major impact on other peripheral euro zone members like Portugal, Spain or Italy, which have seen their borrowing costs fall substantially since peaking three years ago. And world stocks are near all-time highs.
In an appearance at the Council on Foreign Relations in New York earlier this month, Schaeuble said markets appeared to have "priced in" all possible outcomes for Greece.