Greece to Leave Euro Zone on June 18: Wealth Manager

Monday, 28 May 2012 | 7:19 AM ET

Greece will leave the euro zone on June 18 if the populist government wins the country’s elections on the 17 as the rest of the euro zone rounds on "cheaters," Nick Dewhirst, director at wealth management firm Integral Asset Management, told CNBC.com Monday.

The Greek national flag is seen flying above the parliament building on Syntagma Square in Athens, Greece, on Thursday, Feb. 16, 2012.
The Greek national flag is seen flying above the parliament building on Syntagma Square in Athens, Greece, on Thursday, Feb. 16, 2012.

“The euro zone is a club but you get cheaters who get away with it until everyone finds out and at that point you need to remove them otherwise everyone will cheat. It’s better for Greece to leave,” Dewhirst said.

He added that Greek society was built on cheating and scheming, saying “everyone does it” but that voters elsewhere in the euro zone were now calling Greece to account.

“The basic question is that a German has to increase working from 65 to 67 and that is to pay for Greeks retiring at 50. The 17th of June is the perfect opportunity to say either 'we’ll behave' or 'we’ll carry on cheating,'" he said.

Christine Lagarde, the head of the International Monetary Fund (IMF) sparked criticism in Greece after saying that Greeks needed to start paying their taxes, with Socialist leader Evangelos Venizelos accusing her of "insulting the Greek people." Greece was forced to call for a new round of elections, which will take place on June 17 after the country failed to pick a decisive winner in elections earlier this month.

Greece to Leave Euro Zone on June 18: Wealth Manager
Nick Dewhirst, CEO of Integral Asset Management, told CNBC, "The easiest way to understand it is in terms of the ordinary human level, nations are just very large numbers of human beings and it is like a club and you have to obey by certain rules and every German voter now knows that cheating in Greece is a way of life."

Far left parties against the country’s bailout agreement received strong support from the electorate disheartened by harsh austerity measures in a country now in its fifth year of recession. However, polls at the weekend showed support for the pro euro bailout parties increasing enough to form a coalition.

Dewhirst said that there had been a significant amount of "scaremongering" from the euro elite about the ramifications of a "Grexit" but that it would be feasible and even orderly.

“It’s a bit like Y2K, [also known as the Millennium bug, the much- hyped problems that would affect computers globally as the year changed to 2000] there would be a lot less to it then everyone thinks.

"The Greek banking system would close for a week and there’ll be a new currency. Not the drachma but ideally it would be two Geuros (the name given to a possible Greek parallel currency) to one euro so they devalue and fix to the euro,” Dewhirst said.

He added that this would transform Greece and the rest of the euro zone for the better.

“Greeks would no longer be able to afford German cars and Germans would be able to buy Greek villas and the young unemployed in Greece would have jobs as tourism booms. The best thing would be that they [Greeks] could blame the foreigners,” Dewhirst said.

He said suggestions of a bank run and contagion have been overplayed by some quarters.

“Yes, the banks would run dry but it can be done, there is a lot more money electronically than there is cash. In Argentina they closed everyone’s bank account and then they were reopened using Pesos. The club would rally round the rest so the weaker members - Spain, Italy, Ireland and Portugal -would receive a massive support mechanism. The Germans would provide support to the rest of the euro but not to the Greeks,” he said.

Kit Juckes, global head of foreign exchange at Societe Generale, told CNBC’s “Worldwide Exchange” that the best outcome was “the status quo.” “A Greek economy in depression, austerity that guarantees they’ll stay in depression and living on life support from the rest of Europe is the best,” he said.


  • Pro-Russian activists seized the main administration building in the eastern Ukrainian city of Donetsk.

    Deadly clashes in eastern Ukraine have spiked fears of all-out war in the region. So who are the armed, flag-waving rebels who appear to be behind it all?

  • An employee wipes a TV screen in a shop in Moscow, on April 17, 2014, during the broadcast of President Vladimir Putin's televised question and answer session with the nation.

    Russian President Vladimir Putin warned of possible disruption to Europe's gas supply on Thursday, as the U.S. confirmed it would send additional military support to Ukraine.

  • The recovery in the EU's car industry carried on through March, providing some much needed cheer for automakers.

  • Amazon is facing fresh strikes in Germany after pay negotiations with the country's second-largest union Ver.di broke down, the Financial Times reports.

Contact Europe News


    Get the best of CNBC in your inbox

    › Learn More

Europe Video

  • Jan Dunning, CEO of St Petersburg-headquartered hypermarket chain Lenta, says the situation in Ukraine has had no impact on the group, as consumer confidence remains unaffected in Russia.

  • Vincent Deluard, European strategist at Ned Davis Research Group, says the strong euro is a problem for the region's companies, especially for the large exporters.

  • European shares closed higher on Thursday as investors brushed aside concerns regarding Ukraine and focused instead on Wall Street earnings and the latest U.S. jobs data.