22nd September 2011
A Greek default on its debts could have far-reaching impact on the global economy and could even paralyse markets if not handled correctly, one industry expert has argued.
The Telegraph reports David Kerns, a private client dealing manager at Moneycorp, believes the cost of a two-tier euro would be enormous, with a possible second credit crunch in the offing as banks would have to write off considerable losses.
He told the news provider: "Both the US and Britain need economic growth and employment opportunities and with European demand on the wane, an escalation of eurozone problems will serve no one's best interests."
He added that there must be greater willingness by eurozone leaders to therefore tackle these issues if such problems are to be averted.
Further bad news for the euro was revealed yesterday with the announcement of the downgrade of Italy's economy to an A rating by Standard & Poor.
This sparked fears of increasing instability in the eurozone and saw safe-haven currencies like the US dollar and the yen make gains.
Posted by Andrew Johnston
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