Eurozone: If Greece goes . . .

Yesterday we brought you some commentary from various economists and pundits who were arguing that in a sense, Cyprus has just left the Eurozone.

Wealthy households would face new taxes on property and other assets under German plans to prop up the struggling eurozone. Senior advisers to Chancellor Angela Merkel are pushing for better-off households to pay towards the cost of any future bailouts for the weaker members of the single currency. The proposals, from members of Germany’s council of economic experts, raise the prospect of taxes being imposed on property in a country like Spain if its government was forced to seek a bail-out.

Germany's interior minister on Saturday came out strongly in favour of debt-stricken Greece leaving the eurozone, arguing that this would would improve its chances of becoming competitive again."I do not mean that Greece should be kicked out of" the 17-nation eurozone, said Hans-Peter Friedrich in an interview with news magazine Der Spiegel, "but to create incentives for an exit that they cannot turn down."

By Faisal Humayun: The recent Angela Merkel visit to Greece might underscore the commitment of eurozone policymakers to ensure that Greece is very much a part of the eurozone. Greece is also expected to receive EUR130 billion in aid. Without this, the government might go bankrupt by November. The focus of this article is on the reasons why Greece might never be able to pay their already gigantic debt and the government will ultimately default and exit the eurozone.

By Peter Boone and Simon Johnson In the aftermath of the Irish bailout, the German proposal for a future sovereign and/or senior bank debt restructuring mechanism within the eurozone makes complete political sense to the electorate in stronger European countries.  They do not want to write “blank checks” to weaker countries and to out-of-control financial institutions going forward; creditors to countries that run into trouble will face likely losses.

IPE at UNC submits: By Kindred Winecoff Der Spiegel says Greece is about to restructure its debt and leave the eurozone:

According to Der Spiegel, the IMF Wants to Stop Aid to Greece as soon as the ESM is up and running in September. At that time Greece would become bankrupt. This is a Mish-modified translation from German: