Central bank president no longer rules out Greek bankruptcy: FD

The Dutch central bank has not ruled out Greece being unable to meet its debts and potentially going bankrupt, the Financieele Dagblad reports on Friday.


‘It is one of the scenarios. I am not saying that Greece cannot go bankrupt’, the paper quotes the new central bank chief Klaas Knot as saying.
The paper says it is extremely unusual for a central banker, who is also a member of the European Central Bank, to keep the option of Greece’s bankruptcy so open.The official line from European policy makers until now has been that bankruptcy is not on the cards.
Knot told the FD the situation has now changed. ‘I had been long convinced that bankruptcy is unnecessary. The news out of Athens is not always encouraging. All efforts are being made to prevent this but I am now less definite in ruling out a bankruptcy than I was a few months ago.’
The central bank chief also said he wondered if the Greeks really understood the seriousness of the situation. The Greeks are not unwilling ‘but there are doubts about the quality of the government and if politicians have sufficient grip on the country,’ Knot was quoted as saying.
Many economists now see Greece defaulting on its debts as a real possibility.
The full interview will be published in the paper’s Saturday edition.

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