Monday, 21 May 2012

Είναι αυτός ο τρίτος δρόμος για την Ευρώπη;

ISSUES come and go with the markets, which are always casting about their gaze for the next threat that will deny them the tranquil predictability they long for at all times. But for the better part of a year now, one issue never seems to go away, never seems to stop gumming up the works: Greece.
It’s hard these days for market players in London — or New York, or any other place, for that matter — to think about much else.
Here’s how we frame the question now: Will Greece leave the Eurozone, or will it not? Is it possible that we’re asking the wrong question? Increasingly, I believe so. Elections on 6 May kicked Greece’s long-ruling coalition from power and brought forward the very real prospect of a new Greek government that, when it comes to EU-enforced “austerity,” seems much less likely to play ball. Since then, everyone’s spent a lot of time trying to predict, “Will they, or won’t they? Which will it be?”
The answer may be neither. Matthew Lynn of Strategy Economics in London told my colleague Patrick Allen last week that we may see neither a Greek exit from the currency bloc, nor continued Greek acceptance of austerity. We may instead see a smaller version of America’s post-War Marshall Plan for Europe, a largely German-funded plan for Greece “to re-flate its economy and keep the euro staggering on for a couple more years at least,” as Lynn put it.
For countries like Greece, Portugal and Spain, austerity isn’t working. We’re learning that it’s difficult for nation states to shrink their way to a positive GDP. The Greeks, who under austerity have watched domestic businesses shut down by the literal thousands and youth unemployment climb to dangerously high levels, are not going to stay with it. However, the biggest reason that we may see something more ambitious for Greece, some new “bailout” that incorporates a plan for actual growth, has nothing to do with the Greeks. It has to do with the rest of us, including the Germans. We don’t know the effects, the costs, of a Greek exit from the Eurozone. Would the vaunted “fire wall” contain the damage? Would Greece be only the first country to go, once the precedent has been set?
We don’t have the answer to those questions, but one thing we do know is that learning the answers is likely to hurt.What Lynn suggests raises almost as many questions, especially about funding, as it answers. But the ramifications of a Greek pull-out are, in a phrase, terrifyingly unpredictable. Nobody likes that. Don’t rule out a new scheme that spares Greece austerity as they’ve known it, and spares everyone else from learning what a Greek exit looks like.

1 comment:

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