“As Greece struggles to form a government, many in Europe are resigned to its exit from the eurozone, which they claim may be better than years of harsh austerity. There also seems to be a growing feeling that Europe is now strong enough to contain contagion from a Greek exit. In fact, we believe a Greek exit would be an economic and political catastrophe. It is far from certain that the current EFSF/ESM framework will be able to prevent contagion or deal with a bank run in Italy or Spain. A Greek exit could trigger a break-up of the eurozone, which would in turn lead to a deep recession and a new global financial crisis. A Greek exit would also destroy Europe’s soft power and irreversibly damage its standing in the world.

We therefore appeal to European policymakers to give Greece a way to return to a sustainable growth trajectory within the eurozone. It has become evident that the course of extreme austerity without compromises can only lead to economic failure. Policymakers must find a compromise in which Greece brings its public finances in order in exchange for more time to reduce its deficit and to pay back bilateral and multilateral loans. The interest rates Greece pays to its European partners should be cut. This could potentially be linked to progress on clearly defined reforms. This would give the Greek people hope that they will be able to return to economic growth while underlining their own responsibility to deliver on necessary reform. Both sides will have to make sacrifices, but we believe that the idea of a prosperous Europe is worth it.”