Thursday, February 16, 2012

Greece: Costing the exit

by Stephanie Flanders

BBC News

February 16, 2012

Greece isn't "ready" to default, or leave the eurozone. I suspect it never will be.

Even if politicians - and economists - can see the long-term case, the internal turmoil that would come first is hard for anyone willingly to sign up to.

But, you can't help thinking, the eurogroup negotiating the Greek deal is getting readier for a Greek exit by the day.

On balance, a majority of the European officials on Wednesday's conference call probably want Greece to stagger on.

For them, the "no crisis tomorrow" imperative still holds, as it usually does. Given the choice, policy makers nearly always want to buy more time.

But, as Evan Davis and I discussed on the Today programme today (see right), the hardline rhetoric we have been hearing this week is surely a reflection of the fact that the perceived costs of a Greek disaster are not as high as they were in 2010.

In fact, they are a fair bit lower than they were at the start of this year.


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