Ted Malloch, the man selected by Donald Trump for the position of U.S. Ambassador to the European Union sent shockwaves throughout Greece and region when he said on Bloomberg last week that he believed Greece would be better off outside the Eurozone.
In a Greek TV interview on Skai channel with Greek journalist Alexis Papahelas, he expanded on his remarks and doubled down on his views (and perhaps those of President Trump) that a Grexit– or Greek exit from the Eurozone could be something the Trump Administration will try to advance.
Malloch casually referred to “the problem” of “who will manage that transition, and how, to avoid all the chaos and all the instability” that would follow a Grexit.
He did not offer an answer to the question.
Asked whether he thought the Eurozone would survive, Malloch mentioned the upcoming British exit, as well as elections in other countries that could lead to many changes.
“We have had the exit of the UK, there are elections in other European countries, so I think it’s something that will be determined over the course of the next year, year-and-a-half,” Malloch responded, adding about Greece that “I think it is interesting from the perspective of Greece, why is Greece again on the brink; it seems like a deja vu; will it ever end? I think this time I would have to say that the odds are higher that Greece itself will break out of the euro.”
Malloch went on to suggest that Greece outside the Eurozone was a “necessity” and in effect that given messages coming from institutional lenders, the writing was already on the wall for a Grexit.
“Well, I think it’s maybe a necessity. I mean it’s a good question, why? To put the question “why” first, not “how.” I mean, if the [International Monetary Fund] will not participate in a new bailout that does not include substantial debt relief – and that’s what they are saying – then that more or less ensures a collision course with the eurozone creditors.
“Now we all know that that primarily pressures Germany, which remains opposed to any such actions, so I think it suggests that Greece might have to sever ties and do Grexit and exit the euro. So, that’s the first fact.
“I think if you look at the reality, the situation is basically unfolding in a certain direction. What comes afterwards I think is a very interesting and important question; I think we have to face some facts, I mean the first one is that the harsh austerity programs have been a complete failure.
“I have traveled to Greece, met lots of Greek people, I have academic friends in Greece and they say that these austerity plans are really deeply hurting the Greek people and that the situation is simply unsustainable. So you might have to ask the question if what comes next could possibly be worse than what’s happening now.”
Papahelas’ full interview is here: