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On Feb 23, 2015, at 7:19 PM, Louis Proyect via Marxism
<marxism@lists.csbs.utah.edu> wrote:
> Maybe Syriza should have appealed to some other power bloc instead of
> Eurasia. Like the planet Azimgreb in the Alpha Buzalki solar system. I heard
> they were flush with grozeks, their currency. I don't know if they would be
> accepted by European banks, however.
There is a lot of scaremongering about a Grexit, and not only by nervous
investors. It is often overlooked that the eurozone countries also have an
interest in a “managed” Grexit, if it should come to that. While there
undeniably is risk attached, the matter isn’t as cut-and-dried as Louis seems
to think. If it were, there wouldn’t be a serious debate unfolding within
Syriza and among left-wing Greek economists about how to proceed, devoid of
mocking references to grozeks, Azimgreb, and the Alpha Buzalki solar system.
Critics of the Eurogroup agreement like Costas Lapavitsas are not an unworldly
lot, whatever one might think of the merits of their position, which deserves
to be treated with respect.
Below is how one foreign exchange trader on the other side of the class divide
assessed the consequences of a Grexit if there were no agreement this week.
Whether there would be mass protests by the Greek masses against a decision to
leave the eurozone on the scale imagined by the writer is doubtful, although it
must be conceded that the new government has left itself vulnerable by not
preparing the masses for the possibility of a forced exit - instead,
reinforcing the widespread conviction that a withdrawal from the single
currency under any circumstances was unthinkable and would inevitably be
chaotic and catastrophic and worse than the status quo for the Greek people.
How would Grexit work?
By Matt Weller
Futures
February 20, 2015
[…]
• The real market fireworks could come if there is no chance of a deal
and the Eurogroup and co. make plans for a Grexit. Below are our thoughts on
how this could be managed and what to expect:
• The Eurogroup makes the announcement that Greece is going to leave
the Eurozone; we expect this announcement to come after the US market close
sometime after 2200 GMT on Friday.
• If this happens, then we would expect the Greeks to announce capital
controls on all their banks and announce a number of “bank holidays” early next
week, to try and manage the situation.
• Over the weekend we would expect a series of discussions between
Greece and the Eurozone and another statement before the markets open late on
Sunday evening.
• This statement could include a timeline for a “managed exit” from the
currency bloc including a timescale for re-introducing the drachma, how Greece
will pay back its debts (will they be written off?), how the Eurozone will
support the Greek economy, etc.
• A plan of economic support to help Greece manage this transition.
• The ECB is likely to step in to support Greek banks so that they do
not immediately collapse.
We believe that the Eurogroup and co. will want to manage this process in the
smoothest way possible to ensure that excess volatility does not hit the
financial markets and disrupt the Eurozone economy.
However, the consequences of a Grexit announcement in the coming days could
include:
• A sharp drop in the EUR, EUR/USD could fall below 1.10 and move back
towards parity.
• We could see Italian and Spanish bond yields move higher.
• A rush to safe havens like US Treasuries, UK Gilts, the yen and the
Swiss franc. It could also boost the USD, which is also considered a safe
haven, and could weigh heavily on risky assets like global stock markets.
• A sharp and devastating sell-off in Greek stocks and Greek bonds
(pushing bond yields through the roof).
• A sharp increase in the cost of Greek debt insurance.
• Protests on the streets in Greece (75% of Greek people wanted to
remain in the currency bloc when polled before Greece’s January elections.)
• Possible public protests in Germany if Greece’s debts are written off.
Full:http://www.futuresmag.com/2015/02/20/how-would-grexit-work
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