The ‘Grexit’


greece euro

If Greece goes.

Can we be far behind?


Economist Roger Bootle writes:

…the real risk for the eurozone, though, is that Greek default and euro departure go relatively well, and after a year or so Greece is beginning a vigorous recovery on the back of a weak drachma. In that case, the people of Italy, Spain and Portugal would ask: “if Greece can do it that way then why can’t we?” And there wouldn’t be a good answer. The euro-zone would do the splits as soon as you could say Jean-Claude Juncker.

Of course, virtually no one in the Greek establishment wants Greece to leave the euro. Yet the country desperately needs decent economic growth. An end to austerity and a debt write-off would only do half the job. The other half is improved competitiveness. Achieving that through sustained deflation would be slow and painful, and would intensify the debt problem all over again.

It is not unusual for governments to cling on to what is the source and origin of a painful economic predicament. This is a version of what is known in the psychological world as Stockholm Syndrome, when prisoners become emotionally dependent upon their captors and do not want to escape.

Don’t believe the scaremongering: Greece leaving the euro would be no disaster (Roger Bootle, The Telegraph)

‘Grexit’ Could Happen By Accident (Wall Street Journal)

Alternatively: No Exit For Greece (Josef Joffe, New York Times)

Pic: Business Insider

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21 thoughts on “The ‘Grexit’

  1. Mr. T.

    The Eurocrats want control via a common currency and fiscal rules for the countries who use it. They don’t care about smaller economies and small local businesses. They just want large corporations making huge profits which as individuals, they have shares in, seats at the board, etc. Their cohorts, family and friends all share in the insider knowledge, contacts, etc. They never have to endure the hardships their policies cause others.

  2. Milo

    In fairness a great analysis there. If Greece were to leave the Euro and every Greek simultaneously won the Euro millions 104 times in a row for a year there certainly would be questions to ask of the Euro because the two are completely interlinked! We should then leave the Euro so we also could win the euro millions for a year! Or maybe Greece would continue to be f&@kef because their economic problems have little to do with the Euro and a lot to do with the corrupt relationship the Greek people have with their state (42 billion in uncollected taxes).

        1. louislefronde

          Actually not correct. The Irish pound was pegged to Stirling until 1979, and then joined the ERM.

      1. Milo

        It’s just that simple eh! “Devalue your way out of the situation” how does that fix any of the massive structural issues with the Greek economy. They don’t actually export anything useful that devaluing would help. And their debt does not magically become denominated in new drachmas – it remains in Euro, Dollars and wherever else they borrowed from. Except now they are trying to pay with a worthless currency. Make no mistake – a Grexit will more likely mean that Greece becomes a recipient of Irish Aid money then some bizarre resurgence based in “devaluation”.

    1. Nikkeboentje

      Milo, you got there before me. The amount of corruption that takes place in Greece is unbelievable. I spend a few days every month in Greece for work. Everyone wants some kind of back hander or cash payment. Anything they can get their hands on that they don’t have to pay tax on. It seems to be part of their culture and they don’t understand why some people are appalled.
      The Greek banks have stuck their heads in the sand when it comes to non performing loans. They do not want to recognise the fact that people are not repaying their loans, as if they did, they would have to crystallise the losses. I think there are a lot of skeletons in a lot of closets.

      1. Kieran NYC


        For everyone who says we should be ‘more like the Greeks’ and burn the bondholders and f#ck everyone, they should note that the Greeks are STILL f#cked with no end in sight, while we’re starting to see the light at the end of the tunnel and projected to be the fastest growing economy in the EU. We definitely went down the ‘least worst’ route, horrible though it was.

    1. Odis

      To balance the one sided rubbish that we get from the EU organisations, State media organisations such as RTÉ and the government, perhaps?

      1. Paolo

        Good policy. Broadsheet should now balance all references to the EU with an opinion piece from Nigel Farage.

        1. Odis

          Stick with the Ministry of Truth stuff m8. It means you don’t even have to bother thinking. Its all done for you.

    1. Odis

      And your problem with questioning the views and purpose of the bureaucracy that governs many aspects of your life (by and large by diktat) is what?

  3. B Hewson

    Ireland should follow whatever the Greeks do in their economic policy decision making. Sure aren’t they the founders of western civilisation and democracy. What could go wrong. Free water for everyone!

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