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Euro Zone Collapse Is 'Horror Scenario': Swiss CEO

Friday, 1 Jun 2012 | 7:41 AM ET

If the euro zone collapses, the Swiss flag carrier—Swiss International Airlines—would "lose competitiveness altogether," Harry Hohmeister, CEO of Swiss International Airlines told CNBC at the SwissMediaForum.

Level of domestic bank exposure: 2.08% Total PIIGS exposure: $56.4 billion Total bank assets: $2.71 trillion Portugal: $2.9 billion Ireland: $14.3 billion Italy: $18.3 billion Greece: $2.9 billion Spain: $18.1 billion *Figures are rounded
Source: Bank of International Settlements, Swiss National Bank, Zurcher Kantonalbank | Photo:  Sylvain Grandadam | Photographer's Choice | Getty Images
Level of domestic bank exposure: 2.08% Total PIIGS exposure: $56.4 billion Total bank assets: $2.71 trillion Portugal: $2.9 billion Ireland: $14.3 billion Italy: $18.3 billion Greece: $2.9 billion Spain: $18.1 billion *Figures are rounded

The Swiss central bank introduced a limit for the Swiss franc's appreciation against the euro last year to help the country's embattled exporters, in a move characterized by famous investor Jim Rogersas a "huge mistake."

Asked about the ramification of a potential Greek exit on his business, Hohmeister said: "We depend one to one on the economic environment; in that sense, it would have a major impact."

Hohmeister said that there is a certain possibility of the monetary union collapsing.

"In that case, we (Swiss International Airlines) would become 20 to 30 percent more expensive as a result of the strengthening Swiss franc , and we would lose competitiveness altogether. That is a horror scenario," he said.

Markets have been jittery at the prospect of a disintegration of the euro zone and officials such as European Central Bankhead Mario Draghihave called on European Union (EU) leaders to take measures to prevent this from happening.

Greeks will go to the polls on June 17 in general electionsseen by many as a vote on whether the country will stay in the euro zone or leave.

Admitting that an outcome of the Greek situation is too hard to predict, Hohmeister talked about the opposite scenario: "On the other hand you can assume that there will be an orderly solution to this crisis by the EU—even if it is very costly."

"That could [lead] to stabilization in the euro zone, which in turn may correct the exchange rate distortions in the favor of our business. So, yes, there is a chance that we could massively benefit from the situation, too, but overall it is too hard to predict."

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