COULD A "GREXIT" SINK THE EUROZONE ?

If Greece does not obtain a massive reduction of its debt and then decides to leave the EURO, this will not be the end of the EURO or the EUROZONE !

A Greek exit (Grexit) would cost about 245 Billion Euros and could jolt relations with other countries which also have outstanding debts, but the total finances of the Eurozone are solid enough to absorb such a loss ! 

What really worries the EUROZONE at present is that writing down or writing off a substantial part of the debt, could become a precedent for the future.  It might encourage other countries in difficulties to leave the EURO !

The EUROZONE must understand and accept some responsibility for this !    When Greece was allowed to join the EU and then to adopt the EURO as its currency, the accounts presented by Greece were materially incorrect !   This was not spotted by those who verified the statements !  

Later when Greece was virtually bankrupt, loans were made to avoid a Bankruptcy !   Was the real aim not to prevent Greece leaving the EURO ?

The Loans granted were much too high and too late !  Strict conditions to trim National costs were not implemented by the  last Greek Governments !  The repayments were too high and prevented any improvement in the Financial condition of the country.  There was nothing the EUROZONE could then do !

Faced with an impossible task, Alexis Tsipras promised voters that he would demand a reduction of the debt and was promptly elected as the new  Prime Minister of Greece.   He had also promised to reform Greece !

Without the help of a debt write-off he cannot reorganise Greece and make the country profitable again !  If he does not do what he promised, there will be riots in Greece and he could even be lynched ! 

His final option then will be what ?   Readopt the Drachma which was abandoned in 2002 ?   If permitted he will probably want to stay in the EU !   Then he will be able to restore the pride Greeks feel they have lost.

The EUROZONE must, however, revise its basic "Golden Rules"  to avoid more "bankruptcies" in the future !
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