Greece has at least the merit of admitting that it is dying as a country. Somebody may ignore the cry, but those are true tears. We are living in a strange world where it is defended to admit that the impossible is not possible.
At this point, it does not matter if Greece wrote its own drama by joining the Euro. What matter is to give some hope to Greece.
Opting the Euro out is not the solution. This should be done when the economy will stabilize. But which government will opt the Euro out when things will start falling in place. I doubt this will ever happen. To my view, Greece should stick to the Euro independently of the economic situation. The Euro is the future, the drachma is gone.
Somebody has said that if Greece abandoned the Euro it will cause a global crisis. This cannot be true. It will not even cause a major crisis in Europe. How much was the lost in 2008 at the worst of the sub-prime crisis? Much more.
It will be unpleasant for the lenders to write off a part of the debt, but in the end everybody will be better off, if a part of the virtual burden is lifted off. Maintaining the principal of debt at its current notional level is only a psychological burden, as everybody knows that Greece will never pay its debt in our life time.
For generation the debt will be overhanging. If Greece must pay off its debt in 1,000 year, it does not matter if the EU spreads the burden across 1,500 years.
The most important thing is that Greece will economically breath, and the bondholders will continue receiving their interests.
At this point, it does not matter if Greece wrote its own drama by joining the Euro. What matter is to give some hope to Greece.
Opting the Euro out is not the solution. This should be done when the economy will stabilize. But which government will opt the Euro out when things will start falling in place. I doubt this will ever happen. To my view, Greece should stick to the Euro independently of the economic situation. The Euro is the future, the drachma is gone.
Somebody has said that if Greece abandoned the Euro it will cause a global crisis. This cannot be true. It will not even cause a major crisis in Europe. How much was the lost in 2008 at the worst of the sub-prime crisis? Much more.
It will be unpleasant for the lenders to write off a part of the debt, but in the end everybody will be better off, if a part of the virtual burden is lifted off. Maintaining the principal of debt at its current notional level is only a psychological burden, as everybody knows that Greece will never pay its debt in our life time.
For generation the debt will be overhanging. If Greece must pay off its debt in 1,000 year, it does not matter if the EU spreads the burden across 1,500 years.
The most important thing is that Greece will economically breath, and the bondholders will continue receiving their interests.
No comments:
Post a Comment