Famous investor and chief of Berkshire Hathaway Inc. Warren Buffett said the euro zone could withstand Greece’s exit from the union.
“If it turns out the Greeks leave, that may not be a bad
thing for the euro,” Buffett told CNBC in an interview Tuesday.
“If everybody learns that the rules mean something and if they come to general agreement about fiscal policy among members, or something of the sort, that they mean business, that could be a good thing.”
Europe’s most-indebted state stuck in talks with its European partners, as well as the International Monetary Fund over the
terms of its 240 billion-euro ($260 billion) bailout.
The impasse has left Greece dependent upon European Central Bank loans and now risks leading the country to a default within weeks and its potential exit from the euro area.
Late Monday, Greek Prime Minister Alexis Tsipras sought to reach a consensus in Parliament in Athens for an effort to secure bailout funds after proposals to bolster the nation’s finances failed to satisfy his European creditors. Amid the llingering negotiatons, the euro currency extended its biggest quarterly drop versus the dollar.
“I’ve thought that the euro had structural problems right from the moment that it was put it in, which does not mean it will necessarily fail,” Buffett said on CNBC. “You can adapt to those structural problems, but maybe some countries won’t adapt and they won’t be in. It’s not ordained that the euro has to have exactly the members that it has today.”
Charles Munger, vice chairman at Buffett’s Berkshire Hathaway Inc., criticized Greek citizens last week for trying to vote their way to prosperity, while Buffett told in an interview that, over time, the countries in the euro area would need to better coordinate their labor laws, fiscal deficits and general management of their economies.
“It can’t continue with people going in dramatically different directions,” Buffett said. “The Germans are not going to fund the Greeks forever.”
