Saturday, July 11, 2015

German Finance Minister Proposes "5 Year Grexit With Humanitarian Support"

According to the German web sitefocus.de, German Finance Minister Wolfgang Schaeuble has proposed a 5 year Greek exit from the Eurozone with benefits humanitarian support.

Reuters has more:
Germany's Finance Ministry believes Greece's latest reform proposals do not go far enough and has suggested two alternative courses for Athens including a "timeout" from the euro zone, the Frankfurter Allgemeine Sonntagszeitung (FAS) reported.

"These proposals miss out important central reform areas to modernise the country and to bring economic growth and sustainable development over the long term," the FAS quoted the ministry as writing in a position paper.

Instead, the ministry set out two alternative courses for Greece. Under the first, Athens would improve its proposals quickly and transfer assets worth 50 billion euros ($56 billion) to a fund in order to pay down its debt.

Under the second scenario, Greece would take a "timeout" from the euro zone of at least five years and restructure its debt, while remaining a member of the European Union.

If Greece is kicked out, it will never be let back into the EZ, which in itself is not a bad thing outside of the fact that the radical left government that now runs Greece will further run the economy into the ground. With a free market oriented government a Grexit would actually be beneficial for the Greek people, with, of course, a default on the debt.

 -RW

3 comments:

  1. Under this monetary arrangement, default is the ONLY option. The debt is crippling Greece and defaulting is nothing against free market ideology. The left will never blame the Greek government that ran up the debt. Now with bank withdrawals severely limited, it is only a matter of time before the Greek economy (further) implodes.

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  2. Every day that Greece is allowed to descend into chaos is another day closer to a catastrophic collapse of the EU. With China slowly realizing the massive malinvestment of their government has wasted their savings, and Japan printing billions daily, things could get very scary.

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  3. The really interesting thing is the paralysis of the Greek government. It is as if they are trapped in a paradigm from which they can see no alternatives. In fact they have plenty of options if they do a 100% default.

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