The Greek debt crisis could directly impact American exports and the financial system, thereby reflecting on the American economy, warned Dennis Lockhart, head of the regional branch of the Federal Reserve in Atlanta.
According to him, adjustments in the European Union to the fiscal problems arising from the Greek crisis could affect the growth of the eurozone and limit American exports to that region. The crisis could also prompt investors to withdraw from the euro and turn to the "safer" American dollar, which could lead to an increase in the value of the greenback and impact the competitiveness of American exports, he added. Furthermore, Lockhart emphasizes that the possibility of the Greek fiscal crisis causing greater tremors in the financial markets "could have an impact on the banking system or could take the form of a general withdrawal from government bonds." "The Greek crisis could directly hit the American economy," Lockhart warned, being the first official of the Federal Reserve to clearly express such concerns. Although he has not yet factored these possibilities into his forecasts, he warns that "the development of the situation with the Greek crisis requires significant attention." (H)
