It is inevitable that Greece will exit the euro and others will follow, according to economist Roger Bootle, managing director of Capital Economics.
Speaking at Deloitte’s 24th European Hotel Investment Conference in London, Bootle said: “Greece will leave the euro before very long. There is no way Greece can escape from its current travails from within the eurozone
“The best thing would be for Germany to leave, but they are not nearly ready for it yet.”
The economist and Daily Telegraph columnist said a Greek exit would not prompt a crisis but would cause uncertainty for other European countries.
“Pretty much everyone is prepared for a Greek exit. Afterwards, we will see other countries leaving – I suspect Spain and Italy.
“A break-up of the eurozone – that is a separation into different blocks – is part of the solution to the problem [of lack of economic growth in the eurozone].”
Bootle said the government made a “huge tactical error” in talking up the growth in GDP in the third quarter, as the economy was boosted by one-off factors such as the Olympics. He predicted a decline in GDP in the fourth quarter.
Bootle told delegates they may start to see the beginnings of a recovery next year, but warned: “The US, the UK and Europe will continue with austerity and recovery will be slow.”