Monday December 22, 2014 Search
Weather | Athens
13o C
8o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greece, the euro’s sacrificial lamb?

By Alexis Papachelas

Treating debt-wracked Greece as the sacrificial lamb of the eurozone could have dangerous and unintended repercussions.

The more pragmatic American observers claim to be stunned by the manner in which hardline German officials are dealing with their southern European partner. Having experienced the Lehman crisis and its unpredictable fallout, American officials are warning Berlin that a Greek euro exit would not be a simple affair.

Officials on the other side however argue that the markets have already priced in the scenario, thus easing its impact on the global financial system. Also, they think that the crisis is not likely to spread to the rest of the continent.

US officials are shocked at the stubborness of their German counterparts. They are particularly worried that the hardline view is shared by high-ranking officials at the European Central Bank.

To be sure, the Americans have their own reasons to see things differently. First of all, it’s not their money that we’re talking about nor do they have to face pressure from their local electorates. Secondly, they fear that a collapse of the euro would impact on the US economy, also ahead of a national election.

That said, there’s only so much that they can do. They are putting some pressure on the International Monetary Fund, they are constantly speaking with German officials, and are urging Greece to meet its commitments -- all that ahead of Berlin’s decisions in September.

Recently, an experienced US analyst spoke of a rather worrying exchange that he had in Berlin. The American had supposedly argued in front of some German officials that it would be cheaper to back Greece for a while longer since it was nearing the end of its fiscal tunnel, rather than shoulder the big, and quite unpredictable, cost of a euro exit. Their response was that, first, Greece should be punished for not making good on its pledges and, secondly, that the markets would be stunned by a possible Grexit and therefore make things easier for the eurozone to support the rest of the debt-hit periphery.

The coming weeks will show whether German Chancellor Angela Merkel has in fact decided to cross the Rubicon. In other words, it will become clear if she intends to raise the bar too high for Greek politicians and, more importantly, for the people. If she decides it’s over for Greece, the implications for the country would be devastating. We must quickly find out where we stand in order to hammer out our bargaining strategy and all contingency scenarios.

ekathimerini.com , Saturday August 11, 2012 (15:33)  
Klaus Regling stresses debt sustainability through commitment to reforms
‘Crisis of confidence will come back again and again,’ says Thomas Piketty
Who lost Greece
Snubbing the moderates
Civil servants to grade evaluation scheme
As of Monday, Greek civil servants are now able to have a say in the public sector evaluation scheme that is currently undergoing fine-tuning by the Ministry of Administrative Reform. By log...
Police collar fraudsters who conned money out of jobless
Police in Thessaloniki, northern Greece, have arrested four suspects charged with defrauding unemployed people out of a combined total of more than 30,000 euros. Among the suspects is a 42-y...
Inside News
Alpha Bank Cyprus to absorb local Emporiki
The governing board of Alpha Bank Cyprus agreed on Monday to the acquisition of Emporiki Cyprus, the subsidiary of Greece’s Emporiki Bank which has been absorbed by the Alpha Group. Alpha Ba...
Greece’s 10-year bond yield drops 13 bps to 8.30 pct
Greece’s five-year bonds rose on Monday after a poll on Sunday showed that the lead of the anti-austerity SYRIZA party had narrowed before the second round of a presidential vote on Tuesday....
Inside Business
SOCCER
Special day for Abidal, lucky one for PAOK
PAOK scraped through its Livadia challenge beating Levadiakos to remain on top of the Super League for Christmas, one point ahead of Olympiakos that enjoyed a great game at Kalloni and offer...
BASKETBALL
Explosive Barca unfazed by Panathinaikos, bomb scare
Panathinaikos lost 80-67 at home to Barcelona on Friday in a rather meaningless game at the end of the first group stage of the Euroleague, but the encounter will be remembered for the bomb ...
Inside Sports
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Civil servants to grade evaluation scheme
2. Police collar fraudsters who conned money out of jobless
3. Bill aims to close down landfills, curb EU fines
4. Alpha Bank Cyprus to absorb local Emporiki
5. Greece’s 10-year bond yield drops 13 bps to 8.30 pct
6. Traders stay focused on Tuesday’s vote
more news
Today
This Week
1. Prosecutor gathers depositions in Independent Greeks 'bribe' probe
2. Euro shaky on ECB and Greece, dollar keeps edge
3. Greek parliament vote in balance after Samaras election offer
4. Government accuses SYRIZA and Independent Greeks of 'clear alliance'
5. Draghi starts squaring QE circle in month of persuasion for ECB
6. Klaus Regling stresses debt sustainability through commitment to reforms
Today
This Week
1. Samaras summons bond vigilantes with euro exit talk
2. High stakes
3. Europe's drama in Greece needs final act to avoid tragedy
4. A friendly yet firm message from Pierre Moscovici
5. On the edge but not gutless
6. Ship with 200 migrants off Pylos towed to Italy after passengers refuse to stop in Greece
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.