Threadneedle ‘of the view’ Greece will leave euro

Threadneedle chief investment officer Mark Burgess says the asset manager says it is “increasingly of the view” that troubled Greece will leave the euro.

Mark Burgess
Mark Burgess

Burgess said Europe remained in a crisis over the vast levels of government debt held by some eurozone countries.

The chief investment officer (pictured) said: “Peripheral Europe, and Greece in particular is saddled with too much debt, recession and an uncompetitive exchange rate and faces a range of extremely unattractive outcomes.”

The manager of the Threadneedle Equity & Bond fund said it was unclear whether Greeks would accept stringent fiscal measures as a result of any further bail-out.

Burgess said a Greek exit would be similar to a heart attack to the European financial system.

He added, “The question is, is it done in a coordinated fashion, accompanied by a state funded recapitalising of the banking system, a cut in rates, and a massive injection of liquidity, or is it uncoordinated?

“If it is the former then it is potentially positive and markets can ultimately move on and move forward. It would also act as a catalyst for Italy and Spain to properly address their deficits.

“For Greece it would be an extremely unpleasant and traumatic event, but properly planned and implemented would at least give them the chance to move on.”