Wednesday, 15 February 2012

Talking Greece out of the Euro

Sometimes, people just can't stop talking their way into trouble.  A year ago, the idea of Greece leaving the Euro was unimaginable to Eurozone politicians and officials.  Today, it is merely one of a number of options being considered.

I collected a few tasty quotes on the Greece crisis. I fear that the situation will turn really nasty very soon:

"The savings of the citizens would be at risk (if Greece were to leave the Euro). The state would be unable to pay salaries, pensions, and cover basic functions, such as hospitals and schools, and … the country - public and private sector alike - would lose all access to borrowing and liquidity would shrink.  The living standards of Greeks would collapse. The country would drift into a long spiral of recession, instability, unemployment and prolonged misery. These developments would lead, sooner or later, to exit from the euro."

Lucas Papademos, Greek Prime Minister

"It (a Greek exit from the Euro) might be something which would allow Greece also to at least, to some extent, get a new start. It would help Greece to create an economy that can create jobs."

Luc Frieden Luxembourg Finance Minister

"I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the programme."

Jean-Claude Juncker, Eurogroup chairman.

"The clock is ticking and we have to meet this demand. We have a deadline [to meet €14.5bn in loan repayments] on March 20."

Anonymous Greek official quoted in the Guardian

“We are getting closer to default. Germany, Finland and the Netherlands are losing patience.”

A "senior Eurozone official" quoted in the FT

"In the latest month for which we have data, the number of unemployed for November 2011 increased by a massive 126,000, compared with October 2011, to stand at over 1 million. The unemployment rate in November 2011 is now 20.9%, compared to 18.2% in October 2011. The youth unemployment rate is 48%, and the unemployment rate for females (24.5%) is higher than for males (18.3%). Evidence from other measures of labour market slack are equally horrendous: the number of employed decreased by 406,000, compared with November 2010 (a 9.4% rate of decrease), and by 165,00 persons compared with October 2011 (a 4.0% rate of decrease)."

David Blanchflower, UK economist


Anonymous said...

Just planning my summer hols and it struck me that with both Germany and Greece in the Euro, the cost of 2 weeks in East Germany is the same as 2 in Greece.

I suppose that's what they mean by a common market.

Dresden it is then...

droog said...

They've been wrong for three years. Greece will still have to do what it should have done ages ago. The question is, will any of the many FinMin-type figures resign for their errors? Any heads of governments will read a mea culpa before stepping aside? Anyone? Bueller?

miken said...

Nearly all my holidays were in Greece until they converted to the Euro.