Glance at the headlines and you would think that Greek withdrawal from the Euro is a mere formality. Plans are being drawn up, we are told, by responsible policymakers and businessmen. Hedge funds have laid on their bets. Speculation has moved on to whether Greece’s exit will mark the end of the euro. This takes self-fulfilling prophecies to a new level. Greek departure from the Eurozone is a possibility, but is far from inevitable. Departure from the euro worsens the economic problems facing Greece and Europe and so if those who will make the decision are immune from bubbling nationalism, they will opt against it (see Xafa 2012). Aggressive restructuring of Greek debt within the Eurozone, not departure, is the best path. A path made more possible now that Greek austerity is delivering a budget surplus before interest payments.
Greek exit from the Eurozone: Neither inevitable nor desirable | vox – Research-based policy analysis and commentary from leading economists
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