No one is surprised by headlines like this, Greece Considers Exit from Euro Zone. It has been in the back of peoples’ minds ever since Greece was bailed out. I’m interested in Germany’s dilemma, or more accurately, Angela Merkel’s.
The common German volk’s reaction to the Greek bail-out package is typical of what you would expect. They oppose giving them money in the form of a bail-out. If Greece wants the money, they better start living the German way, with a higher work ethic, less bribery and even less corruption (ed. note: as if). The reaction is understandable really. Germany is taking on Greece’s obligations. Angela Merkel’s party has suffered at the polls as a result of this backlash. Unfairly in my opinion, but pointing out reality to an electorate that is too busy pointing fingers never works.
The Euro’s value has been held in check because of Greece (ed. note: among others), making German exports cheaper. The German’s have the strongest economy in the Euro zone. If there was no Euro, the currencies of the lesser performing economies would have depreciated, making those very same exports expensive. Check the next chart (via NYT):
This trend is so noticeable that the Internet (yes, the very same) has began posting headlines like Germany is The Biggest Welfare Recipient There Is.
The German volk are not very receptive to these arguments. I don’t mean to pick on Germans in particular; plebs everywhere would have the same reaction. This is what is called a political problem for Merkel.
And if I was the Greeks, I would seriously consider leaving the Euro. Tourism would be boosted. They could print the money needed to pay off the debts (bondholders everywhere outside Greece would cringe). And, after a few years, the world will consign the Great Greek Crisis to the dustbins of history.