Euro falls to lowest since 2010 as Greece warns of quitting currency
THE embattled euro fell to under $1.26 today, a near two year low.
This was after the former Greek prime minister warned that Greece might leave the euro zone on the day of yet another do-or-die EU Summit.
Plans for a Greek euro exit "cannot be excluded," according to former prime minister Lucas Papademos, a view that sent alarm bells ringing in the German Bundesbank.
"Although such a scenario is unlikely to materialise and it is not desirable either for Greece or for other countries, it cannot be excluded that preparations are being made to contain the potential consequences of a Greek euro exit," Papademos said in an interview in the Wall Street Journal.
Papademos said the overall cost of a Greek exit could range from €500 billion to €1 trillion.
And, according to RTE News, it would have a major impact on market valuations and cause cross-border contagion.
"Current developments in Greece are highly alarming," the German central bank wrote in its latest monthly report.
"Greece is threatening not to implement the agreed reforms and consolidation measures in return for extensive aid. This could jeopardise the continuation of the aid and Greece would have to bear the ensuing consequences."