4:15 am - Thursday April 17, 2014

Greece will not leave the euro zone

Interests, Greeks on the one hand, and European on the other hand, are much too important for the scenario of exclusion Hellenic happen.

From the Greek point of view, despite the dissatisfaction (legitimate) of the population to austerity measures frantic for nearly two years, turning your back on monetary union for a return to the drachma would be significantly detrimental. Much more than the current situation. Indeed, the EU financial assistance provided to Greece is indeed conditional: the second aid package of 130 billion given to Greece in February, spread over several months. It was set in consideration of a European treaty on fiscal discipline and has been signed with Greece, including written commitments from the Hellenic Government. If the new Greek parliament can estimate that these commitments mean nothing, so can not benefit the forthcoming financial assistance plans in Europe. A dilemma for anti-European parties entered parliament Hellene, when you know that due to debt repayment Greek arrives in June. We then observe a real situation of insolvency, which has been avoided until now (thanks to partial default package that has involved the private sector and ultimately the ECB). Against all odds of anti-European parties, it would make even more dependent than a bloodless Greece vis-à-vis international institutions.

From the perspective of the European Union and its currency area, the benefits of excluding Greece are not visible either. In political terms it would go against even the construction of Europe was forged despite the difficulties and differences, since the Treaty of Rome in 1957 and the establishment of the EEC. Financially, the European partners of Greece remain creditors: it would take the risk of not being able to recover the money awarded. This would finally take the risk of a severe contagion of the crisis. Some investors would go much more fiercely tested today, the resilience of other peripheral countries in trouble in the bond markets, like Spain, Italy or Portugal.

Because the Greek and European leaders will take the full measure of these issues, there is no doubt that Greece will not leave the euro zone!

 

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