Nouriel Roubini Does Not See Greece Leaving the Euro (video)

Nouriel Roubini Does Not See Greece Leaving the Euro -

In an exclusive interview, Roubini Global Economics Co-Founder Nouriel Roubini discusses what a Greek exit from the euro would look like. He speaks to Bloomberg's Jonathan Ferro from the Ambrosetti Spring Workshop in Cernobbio, Italy.

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We Are in a Currency War, says Sarah Hewin (video)

We Are in a Currency War: Hewin: Video - Bloomberg:
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Standard Chartered Bank Head of Research Sarah Hewin discusses the central bankers meeting in Paris, expanded stimulus from the Bank of Japan, the weakening yen and euro with Bloomberg’s Manus Cranny and Anna Edwards on “Countdown.” (Source: Bloomberg Nov7)

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Roger Bootle: The Euro Is a Complete Disaster (video)

The Euro Has Been a Complete Disaster: Bootle: Video - Bloomberg: "
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Capital Economics Managing Director Roger Bootle discusses his book “The Trouble With Europe” and what he thinks IS the trouble with Europe with Anna Edwards and Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg June 10)

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European Debt Crisis Visualized (video)

The European Debt Crisis Visualized
Published on Feb 11, 2014 - At the heart of the European debt crisis is the euro, the currency that tied together 17 countries in an intimate manner at the time of the crisis. So when one country teeters on the brink of financial collapse, the entire continent is at risk. How did such a flawed system come to be? Bloomberg Television and Jonathan Jarvis present "The European Debt Crisis Visualized." (Source: Bloomberg)

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Greece: “The situation is getting out of hand”

More on Greece today--“The situation is getting out of hand”--people aren't paying their taxes, utility bills, etc:

Greece warned of public finances collapse - FT.com: " . . . Mounting anxiety that Greece is headed for further political instability and a possible exit from the euro has prompted many Greeks to postpone making tax payments, and has also accelerated outflows of deposits from local banks. Athens bankers estimate that more than €3bn of cash withdrawn since the May 6 election has been stashed in safe-deposit boxes and under mattresses in case the country is forced to readopt the drachma. . . . “The state will face considerable difficulty covering its expenses in June”. . . The EU has held back €1bn from its latest tranche of bailout money pending formation of a stable government in Athens. . . . The struggling state electricity utility PPC has received a €250m special payment from the budget to help cover a widening deficit. The utility has been hit by a sharp rise in non-payments of household electricity bills after the finance ministry imposed an extra “solidarity tax” last year that was added to the bills. “The situation is getting out of hand,” said a private sector economist. “If a government is formed after the June election, it’s going to find that the fiscal programme agreed in March has already been derailed.” (emphasis added)

The Greek election is June 17--but at this point does it really matter who is elected?

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Greece and the Eurozone: Voting with your Money

June 17th is the date for new Greek elections but it looks like the Greek people are already voting (with their money):

Greek politics: Slouching towards the drachma | The Economist: "Today, cash was being taken away from the banks in orderly fashion. There were no queues outside branches in central Athens or its suburbs. Customers ordered cash by telephone and picked it up 24 hours later. Some went straight into safety-deposit boxes at the same bank; some was stashed beneath mattresses in case Greece has to re-adopt the drachma. "People are taking preventive measures," says one veteran banker. "If you own a pile of euros, you’ll feel rich in a drachma environment." Despite their enthusiasm for holding on to the euro, Greeks are fed up with the austerity that German politicians say is the price of continued membership. . ."

Paul Krugman: Jogging for the Exit "What’s happening now is a “bank jog” — Greeks are pulling euro deposits out of banks fairly rapidly, but not quite fast enough to be called a bank run. But where are the euros coming from? Basically, banks are borrowing them from the Greek central bank, which in turn must borrow them from the European Central Bank. The question then becomes how far the ECB is willing to go here; is it willing, in effect, to lend enough money to buy up the entire balance sheet of the Greek banking sector, given the likelihood that this sector will be left insolvent by Greek default? Yet if the ECB says no more, Greek banks stop operating — and it’s hard to see how they can be restored to operation except by ditching the euro and using something else. And if that happens, surely depositors in other European countries will start their own bank jogs …"

Question: If you owned a pile of euros, wouldn't you be better off converting them to pound sterling or U.S. dollars?

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The Greek Sustainability Report and Reaction & Analysis

Greek Sustainability Report

Greek debt sustainability analysis Report in full above--reaction and analysis of the Report below:

UPDATE 2-Greek debt could easily derail again - EU/IMF report | Reuters: "Greece's second bailout programme could easily go off the rails and send the nation's debt rocketing back to today's unmanageable levels, a confidential study by its international lenders shows. The 9-page debt sustainability analysis, on which euro zone finance ministers based their decision on Tuesday to approve a 130-billion-euro rescue programme, is anything but a vote of confidence in Athens' ability to put its public finances back on a sound footing. Indeed the report, dated Feb. 15 and first obtained by Reuters on Monday, describes in the disembodied prose of economic bureaucrats how uncertain Greece's recovery will remain for many years, and how Athens will likely need international aid for an indefinite period. Experts from the European Commission, the European Central Bank and the International Monetary Fund highlighted the risks and questioned the assumption that Greece will be able to return to capital markets in the coming years."

Eurozone finance ministers agree second bailout for Greece; Troika sustainability report says outlook is grim: "The FT says the troika report explains why European countries were so opposed to the new financing programme for Greece. In an article headlined "Greek debt nightmare laid bare", it said: A German-led group of creditor countries – including the Netherlands and Finland – has expressed extreme reluctance to go through with the deal since they received the report." 

Greek accounting cannot hide the urgency for growth - FT.com: "“The troika have had to do some arithmetic gymnastics in order to make the numbers add up but their optimistic assumptions are unlikely to hold,” said Sony Kapoor, managing director of Re-Define, an economic consultancy that has advised European officials. . . . the confidential debt sustainability report points out that even if Greece’s budget reaches a surplus of 2.5 per cent every year, not including debt interest payments, getting “stuck” at that level could prove disastrous: “Debt would be on an ever-increasing trajectory,” the report found. The urgency for growth comes even though European Union officials acknowledged on Tuesday that they would seek significant further austerity measures from Athens throughout the bail-out programme."

Eurozone's shocking prescription for Greece – Telegraph Blogs: "A "strictly confidential" 10-page debt sustainability report commissioned for yesterday's meeting of eurozone ministers concludes that the austerity measures being foisted on Greece as a quid pro quo for a second, €130bn bailout, are quite likely to prove self-defeating, in that the austerity, by further weakening the economy, may well cause the debt to GDP ratio to rise further. Furthermore, the debt "haircut" being required of private investors may prevent Greece from ever returning to private markets for borrowing, making the country indefinitely reliant on official support. After the bailouts, so much of Greek's debt will be held by official repositories, all of who will have preferential treatment as creditors, that no private sector investor would go anywhere near it, knowing he'd be last in the queue of creditors"

The Future Is Not What It Used To Be - NYTimes.com:
The Future Is Not What It Used To Be by Paul Krugman
I’ve been comparing the original IMF projections for Greece with the secret recent sustainability analysis that everyone has. . . . Of course, everyone thinks the latest is wildly overoptimistic."

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Eurozone: dead end zone?

Despite the second "bailout deal" for Greece, things still look dismal for the Eurozone: 

German showdown with IMF looms as Bundestag blocks rescue funds - Telegraph: "Europe can’t find a solution because there isn’t one."

So, what would your plan for Greece be? — Crooked Timber: "I don’t have a solution myself – the more I end up discussing this with people, the more I am reminded of the London Business School proverb taught on some of the gnarlier case studies, which is “Not All Business Problems Have Solutions”."

Euro Agonistes - NYTimes.com by Paul Krugman: "Euro exit would allow a quick devaluation, solving the competitiveness problem — but it would be hugely disruptive and would generate vast ill-will, so it’s hard to see any government taking that step until there really are no alternatives (which may soon be true for Greece, but not the others). So there’s a kind of trap. If you imagine yourself as the Prime Minister of such a country, what can you do? For the most part, I’m afraid, you plead with the troika to make the austerity demands less severe, you do what you can to accelerate improving competitiveness (which isn’t much), and you wait for things either to get gradually better via “internal devaluation” or to get worse and provide the economic and political environment in which euro exit becomes a real possibility. It’s a hell of a way to make economic policy, but I don’t see any magic bullets."

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Greece: a return to the drachma?

Better title for article below: "Only a return to the drachma can save Greece as unemployment soars"--

Can a return to the drachma save Greece as unemployment soars? - Telegraph: ". . . . Mr Papademos warns that default and EMU-exit would lead to "uncontrollable economic chaos". But is that not already the case? No Greek bank has been able to issue a letter of credit accepted anywhere in the world since November. Large Greek companies are having to relocate their headquarters to Bulgaria in order to conduct basic trade. The "drachma risk" has already killed investment. Greece is suffering the anticipated consequences of EMU exit without the benefits, so it might as well lance the boil, impose capital controls, and create a new banking system (as Iceland did). Such catharsis might start to unlock €60bn of cash savings in gold, dollars, German euro notes (letter `X’, Greece `Y’), and such-like, sitting in the proverbial mattress. Foreign investors might start to nibble again, once the Greek exchange rate reflects reality at around seven Chinese yuan. . . . "

And yet, Greek leaders "fiddle" with a "sentimentality" for the euro (flawed currency that it is) while Greece continues to spiral down. And the French and Germans?

The European project is splitting apart at the very core - Telegraph: " . . . . On one hand, the defenders of the orthodoxy, led by the Commission and supported by France (which is exposed to a Greek default more than any other country), is battling to hold the line with another massive bail-out. . . On the other hand, it becomes increasingly clear that Germany, supported by Holland and Finland, has had enough. They see no point in throwing colossal sums of money into what Germany’s finance minister, Wolfgang Schäuble, calls “the bottomless pit” of Greek debt. It is they who have wanted to pile ever more impossible demands on Greece to hurry on a default. If other debtor countries such as Portugal, Italy and Spain follow suit and leave the euro that they should never have been allowed to join – so be it. . . .   However the chips fall in coming days and months, the eurozone will disintegrate. The European dream has entered a nightmare stage from which there is no rational escape and the consequences will be horrendous, for Europe and the world."

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Germany's plan for Greece to leave the euro

Thankfully, Wolfgang Schäuble, Germany's Finance Minister, has taken the lead to try to solve the Greek problem and help them get a "fresh start:"

Germany drawing up plans for Greece to leave the euro - Telegraph: "The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets. . . . the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them." His pessimism has been tipped into despair with a secret European Commission, Central and IMF report that even if Greece made good on its promises, it would not be enough to reach the target of bringing total debt to 120 per cent of GDP by 2020. . . . the Greek government should officially declare itself bankrupt and begin negotiating an even bigger cut with its creditors. For Schäuble, it is more a question of when, not if. . . .  it has support from Austria and Finland - holding the prospect that a eurozone meeting tomorrow will fail to agree the next set of EU-IMF payments for Greece. . . . Rumours are already circulating in Wall Street that banks are preparing for a "credit event" - a technical term used by credit agencies to mean a default - in the days immediately following March 20, as Greece looks likely to be unable to meet its debts. . . . Mr Schäuble maintains that since Greece is already regarded by the financial world as bankrupt, a formal bankruptcy would have no negative consequences for other euro members."

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Greece: the euro has always been a flawed currency

Greece and the return of the economic 'death spiral' | David Blanchflower | Comment is free | guardian.co.uk: " . . . For all the deals being signed in Athens and Brussels, the Greek people have worked out that they have no hope; protest and social unrest now looks a rational option to the ordinary people who are bearing the cost to bail out European banks. Cuts in the minimum wage right now are probably not very smart politics. Greece does still have a card to play – which is "one down, all down". An exit from the euro would result in a depreciated drachma, which would potentially give a much needed boost to tourism. And that sounds better than all other alternatives currently on offer. There is still time for Germany's Angela Merkel to get out her cheque book; but otherwise, it's all over – and quite possibly very quickly. This really is what a death spiral looks like. . . . "

Don't feel bad Greece, the euro has always been a flawed currency--

Euro doomed from start, says Jacques Delors - Telegraph: "In an interview with The Daily Telegraph, Jacques Delors, the former president of the European Commission, claims that errors made when the euro was created had effectively doomed the single currency to the current debt crisis. He also accuses today’s leaders of doing “too little, too late,” to support the single currency. . . . Mr Delors claims that the current crisis stems from “a fault in execution” by the political leaders who oversaw the euro in its early days. Leaders chose to turn a blind eye to the fundamental weaknesses and imbalances of member states’ economies, he says. “The finance ministers did not want to see anything disagreeable which they would be forced to deal with,” he says. The euro came into existence without strong central powers to stop members running up unsustainable debts, an omission that led to the current crisis. Now that the excessive borrowing of countries such as Greece and Italy has brought the eurozone to the brink of disaster, Mr Delors insists that all European countries must share the blame for the crisis. “Everyone must examine their consciences,” he says.". . . Mr Delors says that he shares some of the concerns that were expressed by British politicians and economists about the euro before its creation. When “Anglo-Saxons” said that a single central bank and currency without a single state would be inherently unstable, “they had a point”, he admits. . . ."

In other words, the sooner everyone in the Eurozone gets honest, the better. And the sooner Greece can leave the euro and start rebuilding, the better for the Greeks.

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Greece faces death by a thousand cuts

More on Greece, and its unnecessary and now prolonged suffering:

Greece faces death by a thousand cuts unless it leaves the euro - Telegraph: "Repeated rounds of austerity are proving self defeating, which makes it virtually certain that Greece will eventually have to come back for more. What are Europe's paymasters to demand then? . . . What is more, experience in Argentina and other countries that have both devalued and defaulted suggest that the economic shock of exiting a fixed exchange rate is relatively short lived. Once competitiveness has been restored by devaluation and default, growth prospects improve dramatically. The short sharp shock of exit is very likely better than the death by a thousand cuts implied by continued membership. . . . Consider now what this grim choice of death by a thousand cuts involves. What Greece has in essence committed itself to is an internal devaluation lasting years, if not decades into the future. There is no discernible end to the austerity; year after year, it grinds remorselessly on. Even if everything goes according to plan, which seems deeply unlikely on the record so far, it takes until 2020 to reduce the national debt to 120pc of GDP, a level still far too high to be remotely sustainable. In addition to having to run big primary surpluses into the indefinite future, Greece also faces a massive hit to nominal wages and living standards . . . There is not a hope of Greece growing its way back to debt sustainability while still in the euro. As things stand, capital is leaving the country by whatever means available . . . ."

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Greek Default is not End of the World

Climax nears in Greek drama | Reuters: "Tortuous negotiations over a second bailout for Greece are set to come to a head on Wednesday, putting fragile market confidence to the test on the same day data is tipped to show the euro zone is entering a mild recession." 

While the crazy Europeans continue their state of denial, let's pause for a little reality check. Greece is in default--it is insolvent and cannot pay its creditors. The question is whether the Greeks will continue to agree to the Eurozone's (Germany et al) funding of Greece's payments to its creditors (Eurozone banks et al) and in return submit to further punishment ("austerity") of the Greek people. Hopefully, the Greeks will soon come to their senses--

Krugman Says Greece Will Default on Its Debt, May Leave Euro - Bloomberg: "Greece will default on its debt and will probably quit the European monetary union, Nobel economics laureate Paul Krugman said. “The Greek situation is essentially impossible,” Krugman said at a conference in Moscow today. “They will default on their debt. In fact they already have. The question is whether they will also leave the euro, which I think at this point is more likely than not.”"

Note: leaving the euro doesn't mean leaving the European Union, just the Eurozone.

And the sooner Greece defaults and leaves the euro, the better off the Greeks will be in the long term.

A euro exit is the only way out for Greece - FT.com: "The Greeks will have to leave the euro, recreate the drachma and re-enter the still-existing exchange rate mechanism of the European Monetary System, the so-called ERM-II, which they departed in 2001."

Oh, and who owns the Greek debt? Go here and here. Biggest losers outside of Greece: Germany and France--surprised?

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Why the Early U.S. Didn't Go the Way of the Eurozone

Great article in Bloomberg on early U.S. history and how the Europeans failed in designing their currency--excerpt below:

Why the Early U.S. Didn't Go the Way of the Euro: Echoes - Bloomberg: "We usually don't think of the U.S. as a monetary union, but early in its history it essentially was. Unlike the crisis-wracked euro zone, the dollar zone survived its first few decades without a major crisis, providing the fragile young republic with a period of relative stability during which it began to congeal culturally, economically, politically and militarily. European policy makers hoped that the euro would serve as the unifying and integrating force of the European Union much as, they believed, the dollar had for the early U.S. What the Europeans failed to appreciate was that early America's real glue was not its dollar union but its fiscal one." . . . "So what kept the new nation together? First-rate economic statesmanship, not a shared unit of account. In the early 1790s, Treasury Secretary Alexander Hamilton defined the dollar in terms of gold and silver, but more significantly he established the taxes and institutions (collection system, central bank) that made it possible for the national government to service its own debts and those of the states. Assumption of state debts, as it was called, was positioned not as a bailout but rather as a way of ensuring that each state shouldered the burden of the Revolutionary War equally. Just as importantly, assumption made bondholders beholden to the national government, cementing the union together as Hamilton predicted it would. The U.S. Constitution effectively prevented state governments from endangering the monetary union by prohibiting them from issuing money or making anything other than gold or silver a legal tender. The Constitution didn't enjoin the states from incurring debt but -- with the exception of assuming war burdens -- the early national government refused all responsibility for state debts. . . "

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Eurozone: Reality Check

http://www.telegraph.co.uk/finance/debt-crisis-live/9055782/Debt-crisis-live.html
06.47 In The Independent today, several financial experts offer their views on the future of the euro, with worrying results:

Danny Blanchflower, Professor of Economics, Dartmouth College: “The fundamental problem that has not been addressed is that there is no growth plan for Greece."

Nouriel Roubini, Professor of Economics, New York University: “The eurozone is a slow-motion train wreck. Not only Greece, other countries as well are insolvent. There’s a 50pc probability that over the next three to five years the eurozone will break up."

George Soros, currency trader: "We remain in the acute phase of the crisis; the prospect of a meltdown of the global financial system has not been removed. The trouble is that the cuts in government expenditures that Germany wants to impose on other countries will push Europe into a deflationary debt trap."

Alistair Darling, Chancellor of the Exchequer 2007-2010: "I don’t think anyone can realistically say that the eurozone will survive with its present membership and the longer the inaction goes on the greater the chance that one or more countries will be forced out."

Jim O’Neil, Chairman of Goldman Sachs Asset Management: "The reality is that too many countries joined the euro in the first place and ultimately without dramatic change they can’t probably survive."

Ed Balls, Shadow Chancellor: "Far from being over, I fear the eurozone crisis is this year entering a more chronic, drawn out but equally dangerous phase."

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European Banks: Caveat Emptor

Central Bank Becomes an Unlikely Hero in Euro Crisis (NYTimes)
". .  . the European Central Bank, which in late December under its new president, Mario Draghi, quietly began providing emergency loans to European banks — hundreds of billions of dollars of almost interest-free capital that the banks have used to come to the rescue of their national governments. . . . The central bank is preparing another infusion in February, and many banking experts expect it to be even bigger. The unspoken quid pro quo — that banks need to buy government debt in exchange for the central bank’s largess — seems to be working. The strategy is not without risks, warned Thomas Mayer, chief economist at Deutsche Bank in Frankfurt. “It may please some of the purists as it looks purer, but the banks may become addicted,” Mr. Mayer said. There is a limit to how much of this debt the banks can buy, he said. “Near-term relief of government bond deals may come at the cost of making the banks’ balance sheets more toxic. . . .”"

In other words, we have an already toxic situation in Europe becoming more toxic through official central bank policy.  Many of the European banks were already in trouble due to their Eurozone bond holdings, so now they have nothing to lose in taking on more toxic assets? We may be headed for an even bigger bust down the road and have the ECB to thank for it.

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The euro, it turns out, was not a good idea

These two excerpts say it all:

Roubini: Italy Is Doomed And Will Exit EMU Unless ECB, Germany Step In - Forbes: "The only way to stop the upcoming disaster, according to Roubini, is quantitative easing. The ECB would have to drop interest rates to zero, effectively helping to depreciate the currency, and begin massively buying up Italian and peripheral debt. The euro would fall to parity with the dollar, Roubini says, and Germany and other “core” countries would have to implement fiscal stimulus plans to compensate for the fall in aggregate demand caused by austerity in peripheral nations."

Krugman: The sad irony here is that the euro is, in reality, essentially an Italian creation. If you were part of the dialogue in the late 80s and early 90s, it became clear that the euro was best understood as a plot by Italian technocrats to get themselves German central bankers. This was not, it turns out, a good idea.   http://krugman.blogs.nytimes.com/2011/11/11/original-original-sin/

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Denial is a river . . . in Europe

EUobserver.com / Economic Affairs / ECB will not become bank of last resort, Draghi says: ""What makes you think that to become the lender of last resort for governments is actually the thing that you need to keep the eurozone together?" he (European Central Bank President Mario Draghi) said in response to a question on the issue following a meeting of the eurozone bank's governing council. "No I don't think that is in the remit of the ECB. The remit of the ECB is maintaining price stability over the medium term," he added." http://euobserver.com/19/114163

Paul Krugman (Nobel prize-winning economist) in the New York Times:  "I’ve been charting this trainwreck for a couple of years . . . Let’s just say that the euro was an inherently flawed idea that can work only given a strong European economy and a significant degree of inflation, plus open-ended credit to sovereigns facing speculative attack. Yet European elites embraced the notion of economics as morality play, imposing across-the-board austerity, tightening money despite low underlying inflation, and have been too concerned with punishing sinners to notice that everything was going to blow apart without an effective lender of last resort. The question I’m trying to answer right now is how the final act will be played. . . ."
http://krugman.blogs.nytimes.com/2011/11/01/eurodammerung/

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Goodbye Greece and Goodbye Euro

I wasn't planning on blogging today, but the Krugman and Roubini articles were too compelling and thought provoking. Europe, like the U.S., has a short-term problem and a long-term problem.  In the case of the U.S., the short-term problem is high unemployment and a stalled economy. The long-term problem is fiscal unsustainability (entitlement programs etc.). I'll write more on this on another day.

Europe's short-term problem, simply put, is Greece. Its long-term problem is that the Euro experiment failed to consummate a complete fiscal and monetary marriage between the participating sovereign nations--thereby leading to imbalances with no effective means of remedy--or at least the will to do so. In other words, Spain and Italy are not like Germany (or even France), when it comes to economic and financial practices and issues. The European Central Bank is not therefore in exactly the same position as the U.S. Federal Reserve (in its ability to manage monetary policy for all 50 states).

This leads to the situation where the participating Euro countries have been "shacking up" together without tying the matrimonial knot. In the United States, a very bloody Civil War was fought about 150 years ago that decided forever (among other things) that divorce--err--state secession is not an option (despite whatever Gov. Perry may say)--there is but one central federal government, which has sole control of the printing press and currency (and in effect the economy), for all 50 states. The participating countries in the Euro experiment never went so far, and never achieved full fiscal and monetary integration. Hence the Germans (and French) want Euro monetary policy consistent with what is in the best interests of Germany (and France)--not in the best interests of Greece (or Spain or Italy or Portugal, etc.) or even Europe as a whole.

Want proof? This is what Professor Krugman has to say today:

"I tried to lay this out a while ago. A reasonable estimate would be that Spain and other peripherals need to reduce their price levels relative to Germany by around 20 percent. If Germany had 4 percent inflation, they could do that over 5 years with stable prices in the periphery — which would imply an overall eurozone inflation rate of something like 3 percent.

But if Germany is going to have only 1 percent inflation, we’re talking about massive deflation in the periphery, which is both hard (probably impossible) as a macroeconomic proposition, and would greatly magnify the debt burden. This is a recipe for failure, and collapse.

Another way to say this is that the euro is going to have a chance of working only if the ECB delivers much more expansionary and, yes, inflationary policies than the market now expects. If you don’t think that’s a possibility, say goodbye to the euro project." (emphasis added)

http://krugman.blogs.nytimes.com/2011/09/25/catastrophic-stability/

So the euro project may be doomed long-term (without complete integration etc.). What to do about the short-term problem of Greece? Professor Roubini's answer--"Greece Should Default and Abandon the Euro: Greece is insolvent, uncompetitive and stuck in an ever-deepening depression, exacerbated by harsh and excessive fiscal consolidation. It is time for the country to default in an orderly manner on its public debt, exit the eurozone (EZ) and return to the drachma to rapidly restore solvency, competitiveness and growth. . . . .being stuck in a marriage of convenience that is not working any longer is more costly and painful for the couple and their offspring (children/future generations) than an orderly and civilized break-up. Once the pain and costs of the break-up are managed, both sides can look forward to a more friendly relationship and a brighter future." (emphasis added)
http://www.economonitor.com/nouriel/2011/09/22/full-analysis-greece-should-default-and-abandon-the-euro/ 

OK, so there you have it--goodbye Greece and goodbye Euro.

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