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German Institute ponders temporary Grexit

Cash-strapped Greece should be allowed to leave the eurozone temporarily, Hans Werner-Sinn, the president of Germany’s influential Ifo Institute for Economic Research, told CNBC on Thursday.

“Greece is insolvent… and we are delaying the process of declaring insolvency which would be illegal if it was a private company. It is time for a big debt) haircut and more radical measures to help Greece,” Ifo’s Hans Werner-Sinn told CNBC.

Sinn, who has spoken in favour of a Greek exit from the eurozone in the past, said it was difficult to see how Greece could resolve its problems while remaining in the single currency bloc, but added that any exit or “Grexit” did not have to be permanent.