According to well-known investor, Marc Faber, Greece is bankrupt and should default, positing that a "geopolitical game of chess" was being played out in the region. The comments by Faber, the editor of the "Gloom, Boom & Doom Report," came at a time of heightened tensions between Greece and its international creditors.
The organizations overseeing the country's two international bailouts -- worth a combined 240 billion euros ($259 billion) -- have said the country will not receive a last tranche of aid, worth 7.2 billion euros, until it makes far-reaching reforms.
But Faber, a bearish investor known as "Dr. Doom," said the country's fiscal situation was unsalvageable. "Even if Greece grows at 10 percent per annum for the next ten years, it will not be able to pay its debts back. Greece is “bankrupt. We better face the reality and not kick the can down the road. Greece should default."
Greece/Creditors Disagree
Greece and its creditors disagree on which reforms should be implemented and as such the much-needed aid remains under lock and key. This has prompted speculation that the country could soon run out of money and default on its forthcoming debt repayments to the IMF and ECB, which could, in turn, result in the country leaving the euro zone.
Faber said that while Greece could leave the euro zone and adopt a parallel currency, there that geopolitics were coming in to play and there was no appetite in Europe to let the country exit from the single currency bloc.
"Europe, and in particular NATO (the North Atlantic Treaty Organization military alliance), and the U.S. do not want Greece to leave (the euro zone) because if they do, other people are going to knock on Greece's door -- like the Russians or the Chinese maybe. It's very much a geopolitical game of chess that's being played."