Wednesday, May 13, 2015

Marc Faber - Why Europe Will Never Give Up Greece

Preventing Russian influence in the Mediterranean is the real reason why Europe will never allow Greece to leave the euro zone, according to global investor Marc Faber.

"This is a political issue overlooked by many people," the infamously pessimistic economist told CNBC on Monday. "If Greece leaves, the North Atlantic Treaty Organization [NATO] countries led by America are very afraid that Russia will establish closer relationships [in the Mediterranean]."

Many economists agree that if Athens does default on its multi-billion dollar debt repayments, $840 million of which is due Tuesday to the International Monetary Fund (IMF), the chances of a Grexit, i.e. Greece leaving the euro currency bloc, are high.

But, should that occur, "the Russian fleet can move into the Mediterranean from the Black Sea," Faber said.

Russia's occupation of Crimea and east Ukraine in the Black Sea makes an entry into the Mediterranean very possible due to the Black Sea's close proximity, Faber explained, adding that a Grexit essentially provides Putin the perfect opportunity to do so.

Greece is generally regarded as a gateway to the Mediterranean, it is also a key NATO outpost in the Balkans.

Faber's theory is underscored by European worries of closer ties between Athens and Moscow following Greek Prime Minister Alexis Tsipras' visit to Russia in April.

- Source, CNBC