The consensus of opinion of the ‘great and good’ of European politics and economics is that the Euro can now survive perfectly well without Greece. The Germans aren’t going to succumb to blackmail this time as they did in 2012. They have since worked out what needs to be done. If the Greeks want to go then ‘good riddance’ seems to be the underlying message.
Have they really thought this through? Maybe they have and aren’t saying quite what they think. That’s probably why they are being so hard on Greece and are doing their utmost to try to ensure Greek voters change their minds and vote for one of the ‘sensible’ and ‘responsible’ parties like New Democracy of course!
It will all change after the election result if Syriza win. The Greeks will get all they want and more besides. Sure, technically the Eurozone would probably be better off without Greece, but what if the Greek economy starts to improve once they have left the Euro? It can hardly do any worse. Economic output is some 25% below its 2007 peak. Unemployment is running at close to 30%. Wages are down even for those lucky enough to have a job. There’s no possibility of any significant growth any time soon under the present economic system.
Anyone who understands MMT knows that the Greek economy is almost bound to improve after the initial shock of leaving. A new Greek currency will make the Greek islands ultra competitive. German, and other, tourists will flock there. The Greeks will need to take some lessons on board. They know they need to improve their taxation system. They know they can’t expect a free ride and they’ll have to do whatever it takes to make their new economy work. It should become a matter of national pride for Greece that it does work. That would wipe the smile off the faces of those smug and self righteous individuals who have pointed the finger at Greece with accusations of laziness and other racially based slurs. As the economy improves their currency will rise again, just like it did in Iceland after the shock of the 2008 events.
The powers-that-be in the EU will know this too, deep down. Their worry will be that Ireland, Spain, Portugal, and even France and Italy will see that being outside the Eurozone is working for Greece and will want to be outside too.
That would certainly bring about the end of the Euro. They can’t allow that. Or can they? We can only hope!