'Grexit' or 'Polentry' - Poland could replace Greece in eurozone
by our secret columnist in Brussels
24 August 2012
If Greece leaves the eurozone, all would not be lost. In fact, Poland could replace Greece and become a 'stabilising force' in the single currency area. So 'Grexit' and 'Polentry' would be a happy coincidence – writes our resident satirist Schadenfreude
Why is there such a fuss about a possible Greek withdrawal from the eurozone? It would be unsettling and there would be a run on Greek banks as depositors tried to protect their assets against the uncertainties of the new drachma. It would be bad publicity for the eurozone but it is already in dire public relations straits over its inability to do anything useful.
The pervading fear is contagion. Italy, Portugal and Spain might be caught up in the slipstream of depositor panic. Why should this be, since the eurozone without Greece would be stronger than with it in? If other strapped members also left, the eurozone would correspondingly be stronger - in line with the solution which won the Wolfson prize.
Unless it defaulted and put paid to any prospect of recovery, Greece would still be subject to the conditions of its bail-outs - which include paying the money back. Pending the circulation of the new notes and coins, Greeks could continue to use the euro - just as already happens in Baltic non-members and widely with the United States dollar. Instead of talking darkly about a Grexit, policy-makers should be planning how to manage it.
And when Greece leaves the austerity measures which the European Union/European Central Bank/International Monetary Fund Troika is monitoring, should automatically be eased; Greece no longer being the weak spot in the eurozone or eligible for further eurozone assistance. It strains belief that that a new country should want to join the eurozone, at this juncture. But Poland wants to join. Unlike Britain, Poland fears that the EU is splitting into two parts – eurozone and fiscal pact members in the larger part with a leadership role, and others.
Poland wants to be at the bigger table and Poland would be eagerly welcomed. It probably meets the entry criteria or could plausibly be said to be steadily approaching them. There are shades of Italy and Belgium – although not Greece, which used doctored figures when it applied. So Grexit and Polentry would be a happy coincidence and possibly a stabilising force. Something has to be done and soon. And this scenario looks as hopeful as any.
Why is there such a fuss about a possible Greek withdrawal from the eurozone? It would be unsettling and there would be a run on Greek banks as depositors tried to protect their assets against the uncertainties of the new drachma. It would be bad publicity for the eurozone but it is already in dire public relations straits over its inability to do anything useful.
The pervading fear is contagion. Italy, Portugal and Spain might be caught up in the slipstream of depositor panic. Why should this be, since the eurozone without Greece would be stronger than with it in? If other strapped members also left, the eurozone would correspondingly be stronger - in line with the solution which won the Wolfson prize.
Unless it defaulted and put paid to any prospect of recovery, Greece would still be subject to the conditions of its bail-outs - which include paying the money back. Pending the circulation of the new notes and coins, Greeks could continue to use the euro - just as already happens in Baltic non-members and widely with the United States dollar. Instead of talking darkly about a Grexit, policy-makers should be planning how to manage it.
And when Greece leaves the austerity measures which the European Union/European Central Bank/International Monetary Fund Troika is monitoring, should automatically be eased; Greece no longer being the weak spot in the eurozone or eligible for further eurozone assistance. It strains belief that that a new country should want to join the eurozone, at this juncture. But Poland wants to join. Unlike Britain, Poland fears that the EU is splitting into two parts – eurozone and fiscal pact members in the larger part with a leadership role, and others.
Poland wants to be at the bigger table and Poland would be eagerly welcomed. It probably meets the entry criteria or could plausibly be said to be steadily approaching them. There are shades of Italy and Belgium – although not Greece, which used doctored figures when it applied. So Grexit and Polentry would be a happy coincidence and possibly a stabilising force. Something has to be done and soon. And this scenario looks as hopeful as any.
COMMENTS
You omitted the fact that Polish opinion surveys show the Polish people don't want to join the euro. Until that changes, the country won't be joining.
bobob - er
