There’s no legal process for a member of the euro zone to exit the 17-nation currency union. But with Greece threatening to balk on austerity measures it agreed to in exchange for a fiscal rescue package, European officials are preparing for what was once unthinkable.
Stuart Eizenstat served as ambassador to the European Union and deputy treasury secretary under President Clinton. He says a Greek departure from the euro would drive up interest rates on Italy and Spain, economies far too large to bail out.
“So now we have a situation in which a country which is only 2% of the total GDP of the euro zone, a really tiny economy, threatens to unravel the entire euro and create a crisis with ripples that come onto our shores as well.”
A collapse of the euro would cause the region’s economies to crater, threatening the U.S. economy’s fragile recovery. Collectively, the euro zone is Houston’s second-largest foreign trading partner after Mexico.