Clip-clopping around Europe over the past few weeks, Yanis Varoufakis, Greece's dashing finance minister, has urged the euro zone to chart a new course. Endlessly forcing new loans upon indebted countries like Greece in the pretence that they will one day be repaid, he argued, was a strategy for depression and deflation.
I have read countless articles over the past few week stating a belief that Syriza party leader Alexis Tsipras is bluffing in his threat to stay in the euro but default in debts.
Is it remotely possible to default and stay in the eurozone?
Since this is a multi-part question, let's first address the question "is this a bluff?"
The 2008-financial crisis left many countries on the verge of collapse, as their economies did not manage to retain a sustainable levels. However there is one big looser, that no one mentions, and more precisely the IMF.
Yanis Varoufakis said Greece won’t “extend and pretend” that it can pay its debts, vowing to quit as finance minister if voters don’t support him in Sunday’s referendum.
With banks shuttered and Greece’s economy hobbled by capital controls, Varoufakis said in a Bloomberg Television interview in Athens that he would “rather cut my arm off” than sign a deal that fails to restructure Greece’s debt. The 54-year-old economics professor said he “will not” continue in his post if Greece endorses austerity in the plebiscite.
LONDON: Growing nerves over Greece have been the talk of financial markets for the past week, but online betting firms see only around a one-in-five chance it will leave the euro zone this year -- a lower likelihood than earlier this year. British-based bookmakers Ladbrokes and William Hill ceased taking bets on Greece becoming the first country to leave the euro weeks ago, but on prediction markets sites, which allow punters to bet against each other, the debate is in full swing.
European leaders gave Greek Prime Minister Alexis Tsipras a straightforward choice on Sunday: disown his principles or quit the euro.
Euro-area leaders presented Tsipras with a laundry list of unfinished business from previous bailouts he’d pilloried in opposition and during six turbulent months in office. They gave him three days to enact their main demands into Greek law in exchange for the third bailout in five years.
If Tsipras misses that deadline, Greece may be suspended from the currency union, Finnish Finance Minister Alexander Stubb said.
George Soros, the US speculator turned billionaire philanthropist, has suggested both Greece and Portugal quit the European Union and the euro-zone because of their massive debts."One has so mishandled the Greek problem that the best way forward at present might be an orderly exit" with Greece leaving both the EU and the euro common currency, he said in an interview published Sunday by the German magazine Spiegel.He suggested the same might go for Portugal."The EU and the euro would survive it," he added.
LONDON/BRUSSELS — The need for a new rescue program for Greece promises a drawn-out drama of late-night negotiations but is unlikely to trigger the sort of crisis that has threatened the breakup of the euro in the recent past.
That the collapse of the single currency is no longer an immediate danger reflects the solidity of the political bargain that saved Greece a year ago.