Unfortunately all my predictions about the referendum, the impossibility of a political solution and the Grexit came true. I hope the Greek people vote with a resounding YES! This is really the last chance…
Unfortunately, it looks like we are heading towards default and exit. The Syriza government is seeking a political solution. Yet, given that the IMF and the ECB are involved, I do not think there can be a political solution. What is particularly troubling is that in order to avoid crossing “red lines” Greece will end up crossing a lot more serious red lines after default and exit… Fighting against austerity is a noble cause, but you need to know when to call it quits. This is not a game of chicken.
Check the reports (in Greek).
I just hope that Grexit does not become the hidden agenda of the Tsipras government. And the reason I worry that this may be the case stems from the rhetoric we heard this week on Greece vs. Germany. This rhetoric could be setting the tone for a Grexit.
Quite possibly Greece joined the Euro prematurely. But exiting the Euro now would be suicidal. You cannot correct a mistake with a fatal mistake. Exiting the Euro in order to make payroll, hire more public workers and build a bigger government is a monumental error. Think of it this way. If Greece had stayed in the Drachma, the Drachma would have slowly been devalued to an equilibrium level. If Greece goes back to the Drachma now, similar depreciation will occur but quite rapidly, with serious consequences and without much gain.