Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros

>    Apparently, MMT is a hard concept for the IIF to grasp.

Incompetent disgrace.
No reason an exit has to cost them anything in real terms.

But because they believe otherwise they’ll work to keep Greece in.

Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros

By Andrew Davis and Rebecca Christie

May 25 (Bloomberg) — The cost of Greece exiting the euro would be unmanageable and probably exceed the 1 trillion euros ($1.25 trillion) previously estimated by the Institute of International Finance, the group’s managing director said.

The Washington-based IIF’s projection from earlier this year is “a bit dated now” and “probably on the low side,”Charles Dallara said in an interview in Rome today. “Those who think that Europe, and more broadly the global economy, are really prepared for a Greek exit should think again.”

The European Central Bank’s exposure to Greek liabilities is more than twice as big as the ECB’s capital, said Dallara, who represented banks in their negotiations with the Greek government on its debt restructuring. As a result, he predicted the bank would be unable to provide liquidity and stabilize the euro-area financial sector.

“The ECB will be insolvent” if Greece were to exit the euro, Dallara said. “Europe would have to first and foremost recapitalize its central bank.”