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Of course, they may declare the Bank of Greece insolvent...
In any case, cutting of a country from the international payments system is about as hostile as a physical blockade or a siege. It's the kind of thing the US attempts to do on Iran, who could have predicted that the Eurozone would do it on an EU member state? A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
Greece currently has a Target2 balance of around -100 billion Euros. That money would be gone. Peanuts? Schengen is toast!
Expelling Greece would force the creditors to realize that it is lost in their accounting books as well as in reality. But not expelling Greece would not magically make it not-lost.
- Jake Friends come and go. Enemies accumulate.
And about 1/3 to 1/4 what will be lost if Greece actually defaults. A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
Remember a few years ago when Europe was beginning to act in an anti-corporate way?
Europe as a common market and finance zone is fine. Europe aa a strong and independent political entity - especially one with left-populist anti-corporate leanings - must be prevented at all costs.
If the Troika had any serious interest in maintaining the European ideal of a semi-federalised superstate the Greek crisis would never have happened.
Perhaps I'm overestimating the ability to strategise, But it seems to me that the bad faith has been rather calculated and deliberate, and some possible explanations go beyond simple bullying.
Remember a few years ago when Europe was beginning to act in an anti-corporate way? Europe as a common market and finance zone is fine. Europe aa a strong and independent political entity - especially one with left-populist anti-corporate leanings - must be prevented at all costs. If the Troika had any serious interest in maintaining the European ideal of a semi-federalised superstate the Greek crisis would never have happened.
When they need three iterations of press releases just to align on what they want to pretend happened at a past meeting, how much planning can there realistically be for the future?
ThatBritGuy:
anchored into the very fibre of your political viewpoint.
Or, for that matter, any process by which a central bank can be declared insolvent against its will.
In any case, cutting of a country from the international payments system is about as hostile as a physical blockade or a siege. It's the kind of thing the US attempts to do on Iran, who could have predicted that the Eurozone would do it on an EU member state?
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