24 May 2012

IPE: Greek exit would cause no long-term damage, says Germany's BVV

According to the BVV, which provides pensions for the financial industry in Germany, a Greek exit from the eurozone would generate additional market shocks, but would not cause major long-term damage.

Rainer Jakubowski, a member of the board at the pension fund for German banks, pointed out that eurozone officials had had two years to prepare for such an eventuality. He also claimed that, in two or three years' time, people would look back on the ongoing European sovereign debt crisis and "be surprised to find how easy the solution was".

"The real problem", he said, "is Spain or Italy becoming infected. You cannot plan for this scenario as an individual institution – this would even question the existence of the euro itself". Jakubowski also said he expected interest rate markets to remain in an artificial state – as was currently the case with German Bunds – for years to come. "Unfortunately, we'll have to live with that for some time still", he said.

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