Greece first. This link will take you to the IMF paper on the sustainability of Greek debt that has been referred to in recent discussions. It's moderately heavy going, but worth a read. I have not absorbed it properly, but the take home message appears to be that recent turmoil in Greece has taken the country from a trajectory in which targets were achievable but vulnerable to shock to one in which debt write-offs are required. Please feel free to correct this analysis.
My own interest was attracted by the similarities between the Greek turmoil and the tumultuous events in Australia and specifically the conflict between Lang led administration in NSW and other Australian jurisdictions. See, for example, my last post, Greece, Jack Lang and the Great Depression: are there lessons?
My interest is not so much that actual economics, but the way in which a somewhat similar economic crisis in Australia created interactions within a Federal structure that might be applicable to Greece and the EU. The comments on this and other Greek posts have been helpful in refining my views, but have also illustrated the way in which different questions get mixed together.
The question of what should have been done is different from the question what was done. The question of what should be done now is different from the question what will be done now. These things all get mixed together in discussion.One of the problems with the Greek PM is that he seems to mix together could have, should have and what to do in a complicated, muddled, way without having really clear objectives in his own mind.
I have no especially profound views in all this. I am just trying to use my writing and subsequent responses to clarify my own thinking. Whether Greece will stay in the Euro is obviously an important question, especially for the Greek people.
I am less sanguine on this point than I was a few days ago.Reading the English language European media, my only source of direct information, there seems to be a high level of impatience with Greece at both public and official levels. To many, the point seems to have been reached that the costs of keeping Greece in outweigh the costs of letting Greece go.
The question will this lead to the break-up of the Euro itself, something that has been almost eagerly forecast, is very different. I seem to be very much in a minority here, for I cannot see how a break-up might happen. The political, institutional and economic linkages now created are, to my mind, just too great.
I may be wrong, of course, but you can only work on probabilities. I wouldn't get rid of those Euros just yet.