Marc Faber: More Countries May Follow Greece In Opposing Measures Imposed By The ECB, EU And IMF

Marc Faber, founder of Marc Faber Ltd. and publisher of the famous Gloom, Boom & Doom report, was on Bloomberg TV recently to discuss the Greece debt crisis and whether the debts taken by the country should be forgiven.

Greece Needs A Haircut Of 50 Percent

"They will have to compromise," Faber said. "Greece have basically rejected the austerity proposal by the EU and what we will see is essentially the ECB will either have to essentially continue to pump money into the Greek banking system or they will have to stop and everybody knows in the world that Greece cannot pay its debt at the current [size]."

He continued, "So, what will happen in my view is either Greece will leave the EU and will suffer very badly for a few months maybe even longer, there will be a cash shortage or the EU and the ECB and the IMF will have to cut, a significant haircut. Tsipras has proposed a haircut of something like 30 percent. I don't think that's enough. I think, they will need a haircut of at least 50 percent.

Other Countries May Follow Greece

Faber was asked if he thinks Germany and other country's holding Greek debt should write it off. He replied, "Yes, I agree that they should have a debt forgiveness. But if you forgive debts and you then continue to pump money into Greece and they don't compromise themselves because the government is [bloated] in Greece then the problem will resurface in future."

"But, I would like to focus on some things which is Greece maybe the first country to actually oppose the measures imposed on them by the ECB, by the EU and also by the IMF and more countries may follow," Faber said.