Saturday, April 11, 2015

No Way Out for Greece

Either the current Greek government will capitulate to the demands of the Troika (IMF, the ECB and the EU) or the Troika will capitulate to the Greek government.  Neither is likely.

If the Troika capitulates, then Spain, Italy and Ireland will expect and demand similar treatment.  If Greece capitulates, there could be a Greek civil war.

Greece will begin printing its own currency within the next three weeks and the unraveling of the Eurozone will begin.

None of this had to happen.  Simply letting Greece default in 2010, when the default would have had a relatively minor impact, and keeping Greece in the Eurozone was the simple and obvious answer.  But, this was not an answer that appeals to bureaucrats, who think they can "fix" everything while maintaining absurd policies.  They can "fix" things for awhile, but ultimately reality (and disaster) sets in.

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