out of the euro. Its rough, but its justice. Payback time for a
country and culture that works 6 hours a day and alcohol during lunch.
Goodbye and may their Greek Gods and Titans help them.
BREAKINGVIEWS
Greek default preferable to quitting the euro
HUGO DIXON
Reuters Breakingviews
Published Monday, Sep. 12, 2011 5:28PM EDT
A Greek default is not the same as quitting the euro. A common
misconception links the two together. But a default is both likely and
desirable, provided it is orderly. Bringing back the drachma is
neither. Not only would it be bad for Greece, it would be the
culmination of a major row within the euro zone and trigger a more
virulent phase of the crisis.
Athens' debt load will be unsupportable even after the half-hearted
default agreed in late July. Greece keeps veering off the plan that it
has agreed with its saviours, the euro zone and the International
Monetary Fund. Tension is rising at home, international relations are
being soured and markets' nerves are perpetually frayed. Cutting the
debt substantially would help put Greece on the road to recovery. Even
Germany, once dead set against any euro zone default before 2013,
seems to be coming around to the idea.
It is vital that such a default should be orderly. That means it
should be part of a new agreed program, which would continue to
provide cash to Greece in return for commitments to stick with its
reforms. It also means that Germany, France and others might have to
pump money into their own banks to deal with the fallout. But forcing
the banks to own up to their foolish lending would be a good thing.
But default doesn't mean abandoning the euro. Although Greece should
never have joined the single currency, kicking it out would create
havoc. There's no provision for an exit, much less for an ouster,
meaning that it could only happen as a result of an almighty
diplomatic row. The default would then be a disorderly one, leading to
a collapse of the Greek banking system. That wouldn't just hammer the
economy at home; the contagion throughout the rest of the euro zone
would be severe, with the danger of domino collapses of other banking
systems.
A properly planned default would be cathartic. Exit from the euro
would be the opposite.
