Newspaper article The Evening Standard (London, England)

Euro Markets in Turmoil as Greece Nears 'Catastrophy'

Newspaper article The Evening Standard (London, England)

Euro Markets in Turmoil as Greece Nears 'Catastrophy'

Article excerpt

Byline: Nicholas Cecil and Simon English

TURMOIL gripped stock markets across Europe today as an EU chief warned that the eurozone faced a "cataclysm" if Greece crashes out of the single currency.

Trade commissioner Karel De Gucht admitted the European authorities are preparing plans for a "Grexit" -- Greece leaving the euro.

He predicted it would be catastrophic for the debt-laden country and cause chaos across Europe as a whole.

"C'est fini," the Belgian commissioner told newspaper De Standaard in his home country.

He said the future for Greece if it quits the single currency would be that "after a while you can no longer pay your officials who can no longer pay your pensions. All you can do is have your central bank to print money, and then you get hyperinflation."

He added: "That would cause a cataclysm in other countries that are now under pressure."

Mr De Gucht claimed the eurozone countries would cope with the fall-out and the European Commission later Continued on Page 2

Continued from Page 1 denied it was working on contingency plans for a Greek exit.

Meanwhile, British currency printer De La Rue has drawn up contingency plans to print drachma banknotes if Greece crashes out, an industry source told Reuters news agency.

The company's shares have risen 11 per cent in a month amid rumours it will be needed to help the Greek state bank. A spokesman would not deny it, saying only: "We are not making any comment on the speculation in the press."

Mr De Gucht spoke out as David Cameron and other world leaders were gathering at a G8 summit in America for talks on the deepening crisis.

The FTSE was down for the fifth day running today as confidence continued to sink. It has lost almost 700 points since mid-March, wiping almost [pounds sterling]180 billion off the value of leading stocks -- the equivalent of the whole Greek economy. …

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