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I think the temporary part was there to fudge the target2 balances.
by generic on Wed Jul 15th, 2015 at 04:04:27 AM EST
Temporary exit is the kind of bullshit German economic "authorities" such as Hans Werner (Un)Sinn come up with. And indeed it's all about Target2.

But it's perfectly possible to exit the Euro without exiting Target2. Target2 is the payment clearing system of the European System of Central Banks.

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

by Migeru (migeru at eurotrib dot com) on Wed Jul 15th, 2015 at 04:35:01 AM EST
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I'm finding this as early as 2013, but (Un)Sinn may have proposed it earlier: Prof. Hans-Werner Sinn: "Greece should exit the Eurozone as quickly as possible and be offered a return ticket!" (Klaus Kastner, April 18, 2013)
I herewith repeat my old argument: Greece should hold on to the Euro but simulate a situation, on a temporary basis, as though it had returned to the Drachma. That would entail, among others, special taxes on imports; special incentives for new domestic production and for exports; and - above all - special incentives for new foreign investment.

If one doesn't like that approach, then the next best solution to me would be the introduction of a new local (parallel) currency in addition to the Euro. Also on a temporary basis.

Why not a clear-cut Grexit altogether? That depends on one's vision of Greece's future. If one shares the vision, which I do, that Greece indeed has the chance to become a modernized economy with an adequate level of own value creation, then a Grexit would wipe out that vision. The last 3 years have shown that even with the greatest pressure on society, there is an enormous popular resistance to make the necessary reforms (cutting wages/salaries are not reforms, in my opinion). A Grexit would do away with all such pressures and the likelihood of Greece then making the necessary reforms voluntarily is close to zero, in my opinion.



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
by Migeru (migeru at eurotrib dot com) on Wed Jul 15th, 2015 at 04:47:22 AM EST
[ Parent ]
Wow, that makes about as much sense as a gas-powered, turtleneck sweater.
by rifek on Thu Jul 16th, 2015 at 12:08:44 AM EST
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