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German Chancellor Angela Merkel and French president Francois a lot of meeting today to discuss a possible extension of Greece's bailout package shall we have someone who says the two leaders should ease their stance of the bail out.
Nicholas economy it is is a professor of economics at NYU we joins us now.
So -- first of all put any kind of what what happens to Greece and Europe in general if if Greece.
Has to leave the Euro.
Of Wachovia complete disaster both for Greece and and -- our way Greece.
Well first of all there will be -- run on the banks.
As it in the transition.
From 40 Greece to a new drachma.
That's problem number one problem tool that is going to be very high inflation as the new -- -- gets -- heavily devalued against the Euro.
Certain evade -- -- -- government is going -- -- would -- global drachmas.
Soul of that -- will be creating even more inflation.
And people who want to see in Greece -- incomes fall dramatically so that's a disaster for Greece now what above the rest of the Euro.
Principal -- they're going to be months' time repercussions.
Because of bilateral agreements all -- the banks and Greek companies.
We've European and other foreign companies.
I want to slip into -- here's what I think -- discussion just because wheat we talked about the segment of saying that that you -- Smart person who is not as worried about Greece as you are about.
What what is more pressing right now professor.
Well I I am much more worried about Italy and Spain because our larger -- sort of something goes wrong with them.
The -- falls apart yeah immediately.
So I will be much more worried about Spain and Italy especially scenes the European stability fund.
Is too small to be able to deal we use eternity.
Spain so professor where does that money come from.
Well I mean it would be just -- guarantees.
From the to -- countries of the European Union.
That's -- that's a big deal it's -- rather cheap way tool finance ability.
Do you think -- Angola Merkel will come around she has held off because she's got a constituency that is very much against spending its country's money.
On these other countries which have not been -- has austere or at least responsible.
I think cut -- long -- afraid that she's -- the best thing would be to change some minds and be much more pro European and much for pro Euro.
But I'm afraid that -- following slavishly.
The political currents of their own country.
And the C is going to stay.
And -- -- politician.
Rather than the -- -- over European unity got to leave it at that Nicholas economy it's great to have your views thank you for coming on please come back thank you.
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