Euro Could Rally If Greece Leaves Currency Bloc, Argues Prominent US Multi-Family Office

Tom Burroughes

9 July 2015

The euro will rise if – as seems highly probable – Greece leaves the single currency bloc due to an impasse over its massive debt, according to the chief investment officer of member told us `there is a quiet confidence in Germany that we could get along just fine without Greece in the Euro.’ That idea runs counter to the common perception that a Greek exit will cause the euro to rise and hurt German exports, which are critical to that country’s economy,” Pitcairn said.

“The last proposed agreement put forth by the ECB was actually a document of compromise and delay that gave Greece much of what it desired. I am still astounded the Greeks walked away from it. Such is the power of Greece’s political constituency,” he said.

“We should expect more market volatility as this plays out on a global media stage. The fact that we have not had a substantive market decline since 2011 and the reality that this particular crisis rekindles four-year old fears of global financial crises almost guarantee market gyrations. Still, from a financial risk perspective, we live in a much different world than four years ago. Fears of a global financial “contagion” in which Greece’s economic collapse sets off a domino effect in Portugal, Italy, and Spain are vastly overstated. The current buzz phrase for the Greek situation is that it has been “ring fenced,” meaning financial institutions have, by and large, already immunised themselves against this eventuality, as evidenced by current low default spreads of 1major European banks. That was not the case in 2011,” he said.