vendredi 17 avril 2015
Greece Enters Twilight Zone as Visions of Euro Exit Take Shape
Posted on 02:53 by nice news
With Greek officials hinting they could be forced from the euro and the country’s creditors growing frustrated with the government’s foot-dragging, analysts are asking what might happen if talks break down.
German officials are “taking just about everything into consideration,” Finance Minister Wolfgang Schaeuble said in an interview this week as he urged Greek leader Alexis Tsipras to stop offering his people false hopes. Economists such as UniCredit Bank AG’s Erik Nielsen say it may be just a matter of time before Tsipras’s cash supplies run out and he’s forced to print a new currency.
Adopting the euro was always supposed to be a one-way ticket, so there is no legal precedent or political roadmap for an exit. If you’re waiting for a formal announcement of a clear resolution, you may be waiting a long time.
Next steps for Greece range from retaining the euro to catastrophic divorce; half-measures like having multiple currencies circulate, with aid recycled to repay foreign-currency debts, are also in the cards.
Equally unclear is who would tell the world -- and how -- that Greece has entered an economic afterlife. Possible messengers include Tsipras, the European Central Bank, European Union President Donald Tusk and European Commission President Jean-Claude Juncker, among others.
The following are potential scenarios, based on interviews with economists, investors and former policy makers:
SCENARIO A -- GREXIT AVOIDED
Tsipras, whose Syriza party won January elections promising to undo the tough terms of the bailout loans, capitulates to creditor demands. His brinkmanship drained cash reserves and crippled Greek banks.
Faced with a choice between expulsion from the euro area or implementing austerity in exchange for loans, Tsipras takes the cash. The ECB maintains its support of the financial system.
While aid flows, the government’s days are numbered as his most hardline supporters
German officials are “taking just about everything into consideration,” Finance Minister Wolfgang Schaeuble said in an interview this week as he urged Greek leader Alexis Tsipras to stop offering his people false hopes. Economists such as UniCredit Bank AG’s Erik Nielsen say it may be just a matter of time before Tsipras’s cash supplies run out and he’s forced to print a new currency.
Adopting the euro was always supposed to be a one-way ticket, so there is no legal precedent or political roadmap for an exit. If you’re waiting for a formal announcement of a clear resolution, you may be waiting a long time.
Next steps for Greece range from retaining the euro to catastrophic divorce; half-measures like having multiple currencies circulate, with aid recycled to repay foreign-currency debts, are also in the cards.
Equally unclear is who would tell the world -- and how -- that Greece has entered an economic afterlife. Possible messengers include Tsipras, the European Central Bank, European Union President Donald Tusk and European Commission President Jean-Claude Juncker, among others.
The following are potential scenarios, based on interviews with economists, investors and former policy makers:
SCENARIO A -- GREXIT AVOIDED
Tsipras, whose Syriza party won January elections promising to undo the tough terms of the bailout loans, capitulates to creditor demands. His brinkmanship drained cash reserves and crippled Greek banks.
Faced with a choice between expulsion from the euro area or implementing austerity in exchange for loans, Tsipras takes the cash. The ECB maintains its support of the financial system.
While aid flows, the government’s days are numbered as his most hardline supporters
Greece Enters Twilight Zone as Visions of Euro Exit Take Shape
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