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Chaos or mere agony: a tale of two euro exits

First published: The Sunday Times, 19/05/2012

THERE are 50 ways to leave your lover, according to the song, but only two ways for Greece to leave the euro. Nothing less than the survival of the eurosystem depends on the outcome, which also has trenchant implications for the British economy and the government’s economic strategy. To understand why, we have to consider why Greece matters.

Greece could cut loose from the euro, probably after taking what is now a fast track to default, in what we euphemistically call an “orderly” way. It might leave with the reluctant blessing of its partners, finance to stabilise its banking system, and important eurozone moves to speed up and deepen integration…….more