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The real nightmare scenario for the EU power elite is what if Greece exits EMU and thrives,...

  • Friday, May 25, 2012, 7:37 AM ET
    The real nightmare scenario for the EU power elite is what if Greece exits EMU and thrives, says BNY's Simon Derrick. If Greece leaves, devalues, collapses, and then quickly rebounds (a la Iceland, though it was never part of the eurozone), the other struggling states (and their electorates) are sure to take notice.
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This news story has 17 comments:

  •  
    After the austerity and default, it thriving after an initial collapse is a certainty.
    25 May 2012, 07:40 AM Reply Like
  •  
    How?? If Greece leaves they have to balance their budget immediately, instead of more gradually over a few years. Who will finance them? The greeks know they are in the **** if they leave, that is why 80% want to stay in the euro-zone.. they DONT trust their own government, they trust Europe.
    25 May 2012, 07:40 AM Reply Like
  •  
    That's what makes for the initial collapse. But then equilibrium is attained instantly, and it improves from there.

    Nobody said they'd be living better - they wouldn't, they'd have instant austerity. But then instead of sliding into equilibrium, they'd be growing from it.
    25 May 2012, 07:49 AM Reply Like
  •  
    As the common phrase about company earnings goes..."the comps would be easy to beat".

    I'm rooting for them to do thrive if they do leave euro, but it is the Greeks we're talking about so I'll not be betting any money on them pulling it off.
    25 May 2012, 07:54 AM Reply Like
  •  
    I think it's just they are worried of the change and do not realize yet it would be actually positive. Thriving Greece after they default, exit and after a few years of hard work is imaginable.
    25 May 2012, 07:57 AM Reply Like
  •  
    The country is one big beach resort. It will be flooded with tourists (Germans, Brits, Swiss, Chinese, Americans) and hard currency following a devaluation, with investment soon to follow.

    Devaluation will be painful, but will finally set the bottom.
    25 May 2012, 08:00 AM Reply Like
  •  
    "The country is one big beach resort."

    Greece has known oil, gold and mineral reserves that aren't being exploited because of the poor business environment resulting from the corrupt and inefficient bureaucracy.

    The real goal for Greece should not be to devalue and re-enter the global economy in effectively the same condition as it entered the Eurozone, but to take advantage of the crisis to reform its devastatingly poor business environment.

    This is what the Greek people mean when they say they want to stay in the EZ, it is the hope that being part of it will force the political leadership to take measures and create legislation creating a better business environment. Leaving the EZ without fixing structural inefficiencies makes no sense, and wouldn't be voted for by the Greek people in any referendum, ever.
    25 May 2012, 10:05 AM Reply Like
  •  
    Without looking, I bet they have a more pressing need to burn legislation they already have, than to create new one.
    25 May 2012, 10:27 AM Reply Like
  •  
    The Greeks have a better chance of pulling it off than the Californians do.
    25 May 2012, 07:57 AM Reply Like
  •  
    LOL...that's a mighty low bar you are setting there.
    25 May 2012, 07:59 AM Reply Like
  •  
    Greece is very likely to exit the EUR soon or get a parallel currency, which is effectively the same. The population will start receiving pay in the local currency and the standards of living will drop 75% easily. That will make them more competitive of course and they maybe able to start exporting some things. Prospering is a totally different issue as Greece doesn't have any manufacturing, research or other productive economic base that can be used to build prosperity. It is just a backwards country that is plagued by corruption and exiting the EUR will not change that.
    25 May 2012, 08:02 AM Reply Like
  •  
    It's much easier to live within your means once you've jettisoned principal and interest payments.

    Making those who made bad loans eat the losses is much better than shifting the losses to the broad public while bailing out the ones who willingly took the risk.
    25 May 2012, 08:19 AM Reply Like
  •  
    Is growth from $10,000 better than recession at $100,000?
    25 May 2012, 08:29 AM Reply Like
  •  
    Elliot,

    Greece's debt-fueled bubble was/is unsustainable.

    Starting with the old $100,000 number is a dream that is no longer possible.
    25 May 2012, 08:34 AM Reply Like
  •  
    The real nightmare scenario for the EU power elite is the acknowledgement and recognition of the truth which is backed by facts and logic.
    25 May 2012, 09:07 AM Reply Like
  •  
    The truth is that every country would be better served by adhering to a stable currency like the euro, and living within its means.

    But nobody really wants that. Except the Germans, maybe.
    25 May 2012, 09:14 AM Reply Like
  •  
    No, the real nightmare is a stronger ECU once the weakest link is cut. It's all about exports.
    25 May 2012, 10:12 AM Reply Like
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