t isn’t hard to understand why the financial markets are going into the summer looking shaky. Fresh Greek elections are set for next month, and may trigger a disorderly exit from the single currency. A slow-motion run on the Spanish banking system is under way. Contagion from the euro crisis threatens to spill out into the rest of the world.
But hold on. It’s not necessarily true. If the euro collapses, it might well be a big financial event. Stock markets will wobble, and some banks will lose a lot of money. But it needn’t necessarily torpedo the global economy.
“After the Asian crisis of 1997, everyone was getting out of that market,” said David Marcus, CEO of Evermore Global Advisers and manager of its Global Value Fund. “But if you’d gone in then, you’d have made a lot of money. The same might well be true in Europe.”