Greece's creditors would pay dearly if the debt-wracked country crashed out of the euro, the European Central Bank's former president said Friday, warning that the geopolitical risks of a so-called "Grexit" should not be underestimated.

Not only the Greeks would lose out in a Grexit, as they would face "extremely painful upheaval, but the creditors would have to forego almost all of their loans," ex-ECB chief Jean-Claude Trichet told the daily Frankfurter Allgemeine Zeitung.

Trichet, who headed the ECB between 2003 and 2011, said "the risk of geopolitical contagion is underestimated in Europe, and in Germany in particular."

"Europe has a historic responsibility to firmly anchor the countries from the former communist bloc," the Frenchman continued, pointing to the cultural proximity between Greece and Ukraine via the orthodox churches.

And Greece's geographical proximity to the Middle East and to northern Africa also had to be considered, he argued.

Nevertheless, Trichet said the European partners should not be pushed into a deal with Greece at all costs.

"The absolute precondition is a plan which the Europeans and the International Monetary Fund consider to be credible both in content and its ability to be implemented," Trichet said.

Greek Prime Minister Alexis Tsipras will on Friday ask lawmakers to endorse his new plans to save the country from financial collapse, as eurozone officials pore over the latest bailout package ahead of crunch weekend talks.
Source: AFP