Grexit

Le Figaro is curently running some interesting background pieces on the Greek situation.

One: How would a Grexit be accomplished concretely? It would be difficult. 
Clearly a new money would need to be printed. A new design, sure to be unfalsifiable, 
takes one year to develop. On the assumption of a July 20th payment breach, the 
government could start printing IOUs for internal payments, and stamp the euros 
they have for new money. It would take years to disentangle Greece from all the 
various payment mechanisms currently in place with European institutions.

Two: The other worry is the parallel economy, currently acounting for 30 to 40% of 
GDP. Things would get worse, spreading to everything from houseclesaning to 
liberal professions. And, the expectation is that Greece would keep the Euro as the 
currency for the dark economy!!!

Three: The tourist industry is extremely vulnerable to the economic health of Europe. 
A recession in Europe and Greece's leading industry takes a hit. Worse, there has 
not been much investment in tourism for a while, and now other European countries 
are accessible, at lower cost, for example Turkey, Croatia etc.

I can't say I'm surprised that the Eurogroup of Finance Ministers cannot agree. A 
committee that size couldn't agree on lunch, in the best of cases. Perhaps the  night 
will bring new ideas...

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Sunday

Some interesting tidbits from reading the German press: apparently, there is a document, some 1

000 pages, that defines how an exit from the eurozone should proceed. It is in a vault, somewhere,

accessible to Eurocrats although as yet unopened...


As well, many Eurozone partners are making plans to reinforce the Eurozone after a departure by

Greece, defining mechanisms making sure that 'this doesn't happen again'.


Finally, many feel the current prime minister is a gambling man, who says one thing in Brussels and

another in Athens. His right-wing predecessors had made progress, although they were refusing

to end clientism when this government came in.


Are these really insoluble problems? Personally, I would be curious to know why the 'never again'

scenario cannot include Greece. As for the morals of politicians, say what? I credit the people of

Greece with the foresight to have voted in someone young and idealistic who could jump the

cronyism hurdle. And - he's an engineer - kinda smart and a quick learner, to boot.