3:27PM
Wikistrat post @ CNN-GPS: What happens to the eurozone after the second Greek bailout?
Friday, February 24, 2012 at 3:27PM Editor’s Note: The following piece, exclusive to GPS, comes from Wikistrat, the world's first massively multiplayer online consultancy. It leverages a global network of subject-matter experts via a crowd-sourcing methodology to provide unique insights.
The great Troika of the European Union, European Central Bank and the International Monetary Fund has engineered a second bailout of Greece, once again saving Western Civilization as we know it. But as anyone following this long-running melo-drachma may attest, it ain’t over ‘til Chancellor Merkel says so. This week’s Wikistrat drill looks at possible future pathways for the eurozone.
Read the entire post at CNN's GPS blog.
Reader Comments (3)
If they cared about their people they would default. The debt is to banks that caused the collapse of the world's economy.
It is probable if Greece either defaults or just fails that the unwind on the CDS held by many would tank the US economy among others. There are trillions in that unwind.
Iceland did the smart thing and they are doing well.
Three things not discussed here:
1. How does the austerity standard being demanded of Greece & Co compare with the standard of Germany? I'm talking about retirement ages, tax rates, that sort of thing. Merkel's said, not unreasonably, that the German people won't retire at 62 so the Greeks can retire at 57, but it can also be said that the Greeks won't retire at 67 so the Germans can retire at 62. Which route is taken may depend on whether or not such a double standard is imposed, debt levels be damned.
2. Italy as a unified country is a relatively recent phenomenon. So much so that it's been observed that the industrialized north is far better equipped to be a member of the Euro than the more agricultural south, never mind the peninsula as a whole. As the pressure builds on the periphery states, old fault-lines like these may come under pressure from regional elites trying to score the best deal from themselves.
3. The part of Hamilton's (or his successors') ideas that needs examining is the part that allows U.S. states today to have differing levels of debt without triggering the kinds of nervousness that Greece triggers.
The question will be if the Eurozone can exist with--let´s say 15 istead of 17 members-or if this will cause a chain reaction and meltdown of the Eurozone. Will the 1,5 trillion Euro firewall resist the speculation wave? Will the austerity policy implemented by the EU for all countris solve the crisis or even deepen it like Brüning´ s austerity policy in Germany in the 20/30s? In Europe Germany´s role is perceived as ambilvalent.While many complain that Germany is doing too less, others complain that Germany is doing too much and wants to conquer and controll Europe economically. I myself think Angela Merkel si doing a good job--balancing European and German national interest.