Greek Exit?

[canyonwalker]

Amidst all the wailing and gnashing of teeth the last several months over Greece's debt crisis, with its impending default dragging down financial markets worldwide and spurring debate over the possibility and consequences of exiting the Eurozone, yesterday I saw a single line in a news article that put it all back into proper context

Comments

[kjn]

Political prestige, history, and different economic frameworks.

The dollar economy in the USA has been going for, what, 150 or more years now? It's solidly entrenched with widespread popular support at home and is the default international currency too.

(Which is a large part of what props up the American economy right now, from what I can understand.)

The Euro and the EMU is a lot more ramshackle and with far less instituational inertia. It's a political (and economic) project that still hasn't proven itself, and which still needs to gain solid public support and trust. Greece was also one of several countries that were made part of the EMU despite not fulfilling the requirements for entry, and letting Greece go is not only a loss of prestige but a confession that the leaders of the EU project made a big error in how they pushed through the EMU.

[canyonwalker]

Not only did EU leaders give Greece a pass on some of the entry requirements, but Greece also cheated on the financial requirements afterwards to print/borrow more money than policy allowed.

I understand leaders not wanting to admit they made a mistake. They need to "save face" (an English idiom). But at this point the saying (another English idiom) "Throwing good money after bad" seems literally to apply.