Experts have mixed views as to whether Greece’s debt woes pose a grave threat to the European Monetary Union.
But one thing is clear, star economist Nouriel Roubini told CNBC: “Greece is bankrupt. Look, they have to ask China to help them out.”
He was referring to recent reports that Greece tried to convince China to snap up 25 billion euros ($35 billion) of Greek government bonds.
Greece has seen its credit rating downgraded, as its budget deficit ballooned to 12.7 percent of GDP last year.
European Union members are mandated to keep their deficits under 3 percent of GDP.
If things really go south for Greece, the EU will bail out Greece because it would threaten the euro, Roubini says.
But David Roche, global strategist at Independent Strategy, says Greece’s European neighbors are in no mood to help out.
"The Germans . . . are not prepared to put up with this sort of shenanigans and straight outright mendacity which they have had to endure from the likes of Greece. So what they are doing is hanging Greece out to dry,” he told CNBC.
Ironically enough, Roche sees that situation boosting the euro because it means the strong European economies won’t get dragged down by the weak.
Charles Dumas, chief economist of esteemed Lombard Street Research in London, disagrees, maintaining the euro zone will definitely collapse.
“The longer it lasts, the more painful the ultimate exit will be,” he told Bloomberg.
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