On Thu, Jul 16, 2015 at 3:10 PM, Louis Proyect <[email protected]> wrote:
> > > > http://www.nytimes.com/2015/07/17/world/europe/eurozone-greece-debt-germany.html I know when you forward this, you are being sardonic about those favoring a Grexit. But I think it is worth pointing out the trap here. If I had not been following the Greek crisis closely, it would not have been obvious to me. Everyone on the Greek side who talks of a "friendly" or "orderly" exist from the Euro comes around sooner or later to the idea of a peg during the transition period - where for a fixed length of time the EU maintains an exchange rate of .8 drachman per euro or whatever. Implicit in this kind of peg is a limit on the number of drachma that can be issue during that period, cause no one is going to grant a guaranteed peg for unlimited number of drachma. And - right back as an ingredient in soup again. To gain that peg, Greece would of course be asked to agree to "reforms". Further, the limit on the number of drachma they were allowed to be issued also be a matter of negotiation. So in a "friendly" Grexit, Greece is right back to negotiating with EU with no leverage. That is why nobody, not even the ministers favoring exit from the euro, grabbed at S's deal. No reason to restart negotiations from scratch with the exact same balance of forces as before. To manage a Grexit, you would need extensive planning, figuring out how to put together a subsdience economy for a few years - which would include finding sources to advance things like insulin that Greece can't produce for a few years. And of course the trap there is that as soon as the planning gets serious, meaning hundreds of people are involved, the EU kicks Greece out without having time for the planning that is barely begun. > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Facebook: Gar Lipow Twitter: GarLipow Solving the Climate Crisis web page: SolvingTheClimateCrisis.com Grist Blog: http://grist.org/author/gar-lipow/ Online technical reference: http://www.nohairshirts.com
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