Banks would need 259 bln euros in case of exit, Open Europe says

       
   
Banks would need 259 bln euros in case of exit, Open Europe says

By Andrew Frye

Greece could require as much as 259 billion euros ($322 billion) in immediate aid to shore up its banking system should the country exit the common currency today, according to Open Europe.

The rescue, which could come from other European Union countries and the International Monetary Fund, would be used to confront “a likely bank collapse and urgent cash shortage,” the Brussels-based research institute said on Monday in an e-mailed summary of a research report.

Greeks, who choose a new government on June 17, are bridling against austerity measures designed to tame the deficit and keep the country in the euro. Greece, which was granted more than 200 billion euros of aid over the past two years in exchange for spending cuts, has slid into its worst recession since World War II.

Open Europe expects Greece to reach a compromise with its creditors to remain in the euro even if the anti-bailout SYRIZA party wins the election.

“Given the public support for the euro and the detrimental impact an imminent exit could have on the Greek economy, any new government emerging from the June 17 elections is likely to reach a deal with Greece’s creditors allowing the country to stay in the euro for now,” said Raoul Ruparel, head of Open Europe’s economic research.

Open Europe, which maintains offices in London, was established by UK businessmen and has a vision for a “slimmed-down” EU that encourages free trade and cuts regulation, according to the organization’s website. Its advisory council includes Sir Martin Jacomb, former chairman of Prudential Plc, Gerard Griffin, portfolio manager at GLG Partners LP, and Nigel Smith, the former chairman of the No (Euro) campaign in the UK, according to the website. [Bloomberg]
   
   
ekathimerini.com , Monday June 4, 2012 (21:09)