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Spiegel: Top German Economist: 'Restructuring Greece Within the Euro is Illusory' (20 February 2012)
SPIEGEL ONLINE: So the euro countries shouldn't approve the aid?

Sinn: They should give them the money to ease their exit from the currency union. The Greek government could use the money to nationalize the country's banks and prevent the state from collapsing. The state and the banks must continue to function through all the turmoil that an exit will entail.


SPIEGEL ONLINE: Does the exit from the euro zone entail Greece going bankrupt?

Sinn: No, quite the reverse. The bankruptcy forces the exit. The Greeks will immediately leave if they don't get any more international aid because the bankruptcy couldn't be managed within the euro system. The state would be insolvent and the banking system too. The entire payments system would fall apart. The chaos can only be avoided if Greece leaves and the currency depreciates immediately.


SPIEGEL ONLINE: Why are the euro-zone countries so adamant that Greece must remain in the currency?

Sinn: This isn't really about the country. The Greeks are being held hostage by the banks and financial institutions on Wall Street, in London and Paris who want to make sure that money keeps on flowing from government bailout packages -- not to Greece, but into their coffers.

What, no banks in Düsseldorf involved?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Carrie (migeru at eurotrib dot com) on Wed Feb 22nd, 2012 at 09:10:12 AM EST
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