The author of the best-selling book The Big Short, which tells the story of what led to the Wall Street crisis in America, believes that Portugal may well consider abandoning the Euro.
Michael Lewis, whose book will be published in Portuguese under the title A Queda de Wall Street, says there is an increasing likelihood of Greece leaving the Euro and then, as a consequence, Portugal following suit.
“I think that the first country to leave the Euro will be Greece, but when this happens, other countries are going to think about whether it is worth them staying in the single currency,” he told Público in an interview published on Monday.
The author believes it is very difficult to grow without having the capacity to lower prices and devalue a currency – traditionally the way Portugal dug itself out of a hole in the past.
He said that if Portugal left the Euro and defaulted, the fallout would be a lot less than if Spain or Italy did so.
“It’s very difficult to make predictions, but my question is: at what point will the Germans, the Fins or the Dutch decide that it is not in their interest to continue in this kind of union?
“At what point will there be a fracture and they won’t want to be responsible for Greece’s debts?” he added.
Michael Lewis believes the Greeks themselves may reach the conclusion that they would be better off out of the Euro.
But the same could be said of Germany, with a disgruntled population forcing Angela Merkel out of office because of her pro-Euro policies.
“At the moment, the European authorities are coming up with solutions that are so complicated that the Germans are wondering why it is they are so hooked up with the debts of others,” he explained.
“I think the political waters will get even hotter, the people in these countries will get more agitated and, in the end, we’ll see the fragmentation of the Euro, with some countries leaving it,” he said. C.G.
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