Australia’s economy – although on the right track – is still not immune from further deterioration deriving from the European crisis, says Treasury secretary Martin Parkinson, who painted a grim picture if Greece left the eurozone.
“Every debt that is denominated euros would jump dramatically, its banking system would collapse,” he told a Senate estimates hearing.
It would also be hard to see how Greek firms would not be “pushed to the wall”.
“So within Greece, one could see a very, very serious fall out.”
Dr Parkinson commented that Australia’s economic position is very good. However, he did go on to say that Australia would not be able to avoid being impacted if things in Europe deteriorated drastically saying “there is no way [Australia] would be immune to some of that fall”.
“I don’t want to leave anyone with any impression that there are no risks in Australia,” Dr Parkinson said.