JPMorgan Chase & Co. (JPM) chief Economist Bruce Kasman said Greece is insolvent and headed toward a depression that will cause catastrophic damage across Europe.
“We have a social contract that’s been broken between Greece and the rest of the region,” Kasman said today during a panel discussion at the Institute of International Finance annual meeting in Washington. “Greece is insolvent and the European Union needs to deal with that. It hasn’t yet come to terms with that.”
Kasman said the uncoordinated and sporadic response from the region’s political leaders has “fed fears” in the markets that they don’t have the wherewithal to deal with the region’s fiscal problems. The lack of clarity in solving Greece’s credit problems has exacerbated the problem.
“Damage is done,” Kasman said. “Europe in our mind is entering recession.” Greece is heading toward a depression, he said.
To contact the reporter on this story: Dawn Kopecki in New York at [email protected]
To contact the editor responsible for this story: David Scheer at [email protected]