Today the Greek politicians, led by the charismatic leftist Alexis Tsipras and the no-tie-wearing, motorcycle-riding bad boy of European politics, Greek Finance Minister Yanis Varoufakis, are in a scramble to try save Greece from its financial woes. With the Greek economy still in the doldrums, the denouement of the narrative has stronger geopolitical concerns. Credit Suisse analysts put it well in a note to clients, “The problem is the euro leaving Greece, not Greece leaving the euro.” The question whether to Greek or not to Greek goes further than the economics and its impact on the financial markets.
If a “Grexit” happens, there is fear of contagion amongst other EU sovereigns who are in dark financial times. Were Greece to exit and survive, what would stop other weaker economies from pulling out of the currency and going at it alone and therefore setting the wheel in motion for the collapse of the euro as a currency?
The European Union does not want that to happen and a Greek default could get the snowball rolling. We still do not know how the drama will end. We, as the audience to this tragedy, are at a point where we feel pity and fear for Greece. The citizens are fearful that the country has no money so they flock to the banks to try get theirs out. Chaos has ensued. Until the situation is resolved, there will be no cathartic relief.
To Greek or Not To greek
This was on condition that they clean up their act through the implementation of austerity measures which included government spending cuts and lowering of government wages, where one in five citizens worked.
This was on condition that they clean up their act through the implementation of austerity measures which included government spending cuts and lowering of government wages, where one in five citizens worked.
The Greek economy is very small relative to the Eurozone as a whole and is only slightly larger than the economy of Connecticut. It is a test of the resolve and legitimacy of the Eurozone.
TO GREEK OR NOT TO GREEK?