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Schaeuble Rules Out Greek Default and Plan B October 14, 2012

Posted by proeconomia in Fiscal policy, Main, Monetary policy, News on Greece, On the crisis, Opinion.
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Have a look at this article from Bloomberg. You may or may not agree with the current policies being implemented in Greece but there the truth in this: Greeks and the Greek economy have been under great stress and in a recession which is going to be on record next year (six consecutive years of negative growth). If you take a look at the global growth data from IMF here you will find very few instances after 1980 that such a situation occurred. Therefore, anytime anyone raises the prospects of Greece leaving the euro at this state of the economy (with no productive capacity, corruption, tax evasion, increased unemployment, low wages, brain drain etc.) probably has an ulterior motive. Both in the Bloomberg article and elsewhere in today’s Greek news the issue of Grexit is raised again. As economists we all know that there is no free lunch for anyone around, so someone has to pay the cost for such an outcome but also someone is going to reap the benefits from Greece out of the euro. And, as we have done many times in other posts, the question is this: who is going to reap the profits of a Grexit? Names and occupations please! Names and occupations!

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