- My piece in The Huffington Post entitled Sure there’s Greece… But what about Spain?
- My ‘take’ featured in The Washington Post under the title How bad would it be for Greece to leave the euro?
- Participating in a radio debate, ABC Radio National, on whether Greece should exit the euro, entitled No happy ending if Greece leaves the euro. Transcript follows:
MARK COLVIN: Greeks have been taking hundreds of millions of euros out of the country’s banks over the last few days – a sign that many of them don’t see any alternative to the country crashing out of the eurozone.
More about bank runs shortly.
But global financial markets are still spooked too – subdued today, but mainly because they’re marking time.
Some economists say a new, less severe program isn’t possible with Greece as part of the euro.
Others say the costs of a eurozone exit to Greece and the rest of Europe are simply too high to bear.
Business reporter Michael Janda.
MICHAEL JANDA: It seems joining the euro is like joining the Mafia; once you’re in, there’s no way to get out alive.
YANIS VAROUFAKIS: The moment this gets out, imagine what the ramifications for Portugal, for Ireland, for Italy for Spain?
MICHAEL JANDA: Yanis Varoufakis, a professor of economic theory at the University of Athens.
YANIS VAROUFAKIS: Europe is already on the brink of a very serious recession and Greek exit, with all the uncertainty that it will create; the whole of Europe is going to be suffering. A Greek exit will be a bit like the Greeks poisoning the swimming pool water in which we have to swim.
MICHAEL JANDA: Other economists say Greece must escape the vice-like grip of austerity that has seen its economy contract non-stop since the onset of the global financial crisis in 2008.
Professor Costas Lapavitsas from London’s School of Oriental and African Studies.
COSTAS LAPAVITSAS: These policies are killing the country and if Syriza is prepared to do something to lift the strangle hold then that’s a great piece of news for Greece.
MICHAEL JANDA: Syriza is one of the leftist groups that performed well at the recent election and is pushing for a renegotiation of bailout conditions that have imposed austerity on Greece.
Its leader Alexis Tsipras says he doesn’t want Greece to leave Europe but he also wants a better bailout deal.
ALEXIS TSIPRAS (translated): Our choice is to stay in Europe without austerity policies. We are in favour of the euro without the austerity that is destroying it.
MICHAEL JANDA: Syriza is expected to perform even better in the fresh election to be held on June 17, after a government couldn’t be formed out of the current parliament. That might hand it the power to push its battle against spending cuts and tax rises.
But Professor Lapavitsas says a big push against austerity is likely to see Greece forced out of the eurozone.
COSTAS LAPAVITSAS: It is pretty clear that these major changes are not possible within the confines of the European Monetary Union. If they undertook thesepolicies, they would very rapidly find themselves on the brink of exit.
MICHAEL JANDA: But the director of the Institute of Global Finance at the University of New South Wales, Professor Fariborz Moshirian, says the cost of Greece leaving the eurozone will be far higher than keeping it in.
FARIBORZ MOSHIRIAN: The second bailout package for Greece was around $US 170 billion but according to the Institute of International Finance, which represents over 450 banks, the collateral damage of seeing Greece leaving euro, will be something about $US 1.3 trillion.
MICHAEL JANDA: And both Fariborz Moshirian and Yanis Varoufakis are not convinced that a stand-alone Greece, with its own devalued currency, will be substantially more competitive than it is under the euro.
FARIBORZ MOSHIRIAN: The reality is that the Greek economy is not going to be attractive to foreign investors because simply they do not have the infrastructure like some other advanced economies within eurozone to specialise in certain goods where they can in effect increase their export revenue.
MICHAEL JANDA: Yanis Varoufakis says the weeks needed to transition to a new currency could lead to complete civil and economic chaos in Greece, unlike Argentina which simply devalued the money it already had in circulation.
YANIS VAROUFAKIS: It’s one thing to devalue currencies and do this overnight, it’s quite another to create a currency. My colleagues tell me, who work in the Bank of Greece, it will take actually, at least eight months to actually print the new money.
MICHAEL JANDA: Professor Varoufakis says it’s most likely there’ll be a fresh set of negotiations between a new Greek government and European and global financial leaders.
That’s provided financial markets don’t force the issue first.
YANIS VAROUFAKIS: The most likely scenario is that we’re going to have a continuation of this chicken game – this confrontation between the Greek government and the European Union and the question is who is going to blink first and whether whoever blinks first this will be soon enough before the whole thing collapses.
MARK COLVIN: Professor Yanis Varoufakis ending that report by Michael Janda.