The decision to keep Greece in the EU, an arrangement that benefited Germany and rekindled bad feelings dating back to World War II, is crumbling. Immense economic, social, and political troubles/pressures, reminiscent of the problems seen in the Great Depression, has many independent observers calling for an immediate debt reduction (default) measures not only to maintain their status in the EU but also any potential for future prosperity for the Greek people. Yet as the headline below suggests, EU leadership continues to reject any sort of 'haircut' until Greece exits.
Euro, however, demands debt reduction for heavily debt burdened EU members. This includes Greece, Italy, Portugal, Spain, and even France. Don't expect improvement in the EU zone economy until it happens or countries follow Britain's lead of exit and devalue. Sure, Britain will feel some short-term pain, but devaluation will help them recovery faster. This path to economy recovery will not go unnoticed by struggling EU members. The will of the people, though at times ignored and opposed for several cycles, always prevails longer term.
Headline: Schaeuble: Greek “haircut” only if Greece leaves the Eurozone
Wolfgang Schaeuble in a statement he made just before the upcoming Euroworking Group he ruled out the possibility of a haircut of the Greek debt. He underscored that something like this would have been a violation of the Lisbon Treaty. As he said, something like that could take place only if Greece was not inside the Eurozone.
“We must continue to push Greece to make reforms in order to become competitive. Otherwise the country will have to leave the Eurozone”, he stated.
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