“I don’t think we’ve seen the worst yet in countries like Spain and Greece. They have such serious problems that Europe is going to be in a very difficult position during the next six to 12 months,” Borg told public broadcaster Swedish Radio.
The Swedish finance minister, whose country is not a member of the eurozone, said he would not be surprised if Athens had to leave the 17-member euro bloc in the foreseeable future.
He stressed that while there was “much support” for the country in Europe, “we can’t rule out the possibility that Greece will end up in a situation where it in practice leaves the euro in six, nine or 12 months.”
Borg said he wasn’t “sure how much we should dramatise” such a scenario.
“Banks in Europe are prepared for problems with Greece,” he said, all the while acknowledging that “it could get a lot messier in Europe.”
He said Athens had to ensure that its reforms were implemented and noted that political will was not the problem. Instead, reforms passed by parliament were not trickling down to authorities and being implemented as they should.
Borg was also of the opinion that Spain may need a bailout, saying there was “great uncertainty about how its regions are managing their public finances.”
“I don’t think you can rule out that ways will have to be found to help Spain,” he said of the eurozone’s fourth largest economy.