Would ejecting Greece from the Euro be a good thing?

BlondeHeadOn

As a lot of the turmoil in the stock markets is being blamed on loss of confidence and lack of a definite decision or plan, my question is whether a short sharp shock to the Eurozone - like throwing Greece out of the euro - might actually be a good move?

My reasoning is: Greece is going to default anyway, and basically lied to get into the euro in the first place, so there are grounds for booting it out of the club. (I also think this would probably be the best thing for Greece too in the long run, but that's a different argument).

By booting out a 'miscreant' from the euro club, might this provide a short sharp shock to the other struggling economies - like Italy and Spain- and send a message to get themselves sorted or it could happen to them too....

It would also prove that the ECB is not going to bail out any country regardless of what they do, so give an 'option of last resort' with real teeth.

Anyone else agree?

Wookster

At this stage I'd hazard a guess that any decision is better than letting this slow train to chernobyl leave the platform.

It doesn't have to be the right choice buwe need a firm, concrete choice that needs to be followed through.

BlondeHeadOn

Wookster wrote: »

At this stage I'd hazard a guess that any decision is better than letting this slow train to chernobyl leave the platform.

It doesn't have to be the right choice buwe need a firm, concrete choice that needs to be followed through.

I agree totally with this, and I also think it needs to be a big decision rather than a bit of tinkering around the edges.

Rinoa

The way Greece is going, it seems highly unlikely it will comply with it's agreed deficit reduction plan. The next tranche of dosh from other euroland countries will not therefore happen.

At which point Greece will have to leave the EU of it's own accord and default. This way the EU can't be accused of kicking Greece out.

EU then agrees to bail out banks that suffered by the default.

Problem solved.

vax2002

They wont throw anyone out, they fear nationalism to strongly, for a country in nationalism is like having a hornet in the bees nest, it consumes everything for its own gain at the cost of everyone surrounding it.

BlondeHeadOn

Rinoa wrote: »

The way Greece is going, it seems highly unlikely it will comply with it's agreed deficit reduction plan. The next tranche of dosh from other euroland countries will not therefore happen.

At which point Greece will have to leave the EU of it's own accord and default. This way the EU can't be accused of kicking Greece out.

EU then agrees to bail out banks that suffered by the default.

Problem solved.

I agree with your first points entirely, and think that it's going to happen that Greece has to leave the euro sooner or later anyway.

BUT my point is that the Eurozone need to take some kind of decisive action right now - so why not actually boot Greece out?

My question is: would this have a positive effect on the rest of the eurozone economy, in that it is:

a) a decision, rather than a load of waffle

b) a warning to other problematic countries (like Italy) to pull their socks up or it could happen to them too, and

c) it may strengthen the euro to have shown some teeth.

???

Rinoa

BlondeHeadOn wrote: »

I agree with your first points entirely, and think that it's going to happen that Greece has to leave the euro sooner or later anyway.

BUT my point is that the Eurozone need to take some kind of decisive action right now - so why not actually boot Greece out?

Well, you have to have the agreement of all EU countries - and there would be a few who would not want Greece to go, almost certainly all the other PIIGS fearing they may be next.

chewmylegoff

i don't think the EU can actually boot greece out of the euro. i think the only way that greece can leave the euro is by self-determining to leave europe altogether. any other solution would require a new EU treaty, which greece would presumably have to agree to...