Will they stay or will they go?

Will they stay or will they go?

KPMG head of macroeconomics discusses the risk of Greek exit from the Eurozone

Also on KPMG.com

Yael Selfin, Head of Macroeconomics, KPMG said: “As the last date in Greece's debt saga passes by safely, with the Greek government repaying its dues to the IMF, we should remember this is only one repayment in many payable over the next five months.

"At risk is a largely unintended and unplanned Grexit from the Eurozone (and possibly EU), which could see the Greek economy contract by over 6% in the first year, while it scrambles to re-establish its own currency and gain market trust by, one hopes, pursuing coherent fiscal and monetary policies.

"The direct impact on the rest of the European economies is likely to be much less significant, in particular now that banks and many other businesses have reduced their exposure to the Greek economy. But the political significance may be more important, symbolising the potential limitations of EU politicians to resolve problems in-house.

"Medium term prospects in an event of an unintended Grexit taking place over the coming months, however, are not too gloomy. Weaker Greek currency should make the economy more competitive and boost exports, and much needed foreign earnings. Elsewhere, once it is clear no other country is likely to exit the Eurozone club, the uncertainty should be lifted and investment flows return to some of the so-called 'peripheral' European economies.”



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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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