Greek exit ‘catastrophic for Europe at very least’

The damage to the rest of Europe from Greece leaving the euro would be “somewhere between catastrophic and Armageddon”, the chief negotiator for the body representing private sector holders of Greek bonds said yesterday.

Charles Dallara, who as head of the International Institute of Finance (IIF) spent months in Athens negotiating the largest ever sovereign debt restructuring, also said he had seen evidence that more people were moving their cash out of Greece.

“There has been a pick up of deposit flight from Greece,” Dallara told reporters, but added he thought this could be stabilised “once you get a new government in place, if that government reaffirms its intention to remain in the eurozone.”