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I assume that Varoufakis gambled that the EU/Troika would never allow a Greek default and ultimately succumb to Greece's demands. However a Greek default (at le
by jcfrei 11y ago
I assume that Varoufakis gambled that the EU/Troika would never allow a Greek default and ultimately succumb to Greece's demands. However a Greek default (at least on parts of its debt) has been very likely for quite some time now. The burden of this default would be mostly carried by the ESFS and as a consequence EU countries (because they provide the guarantees). In a worst case scenario most countries could probably cover the losses on Greek debt by issuing new government bonds themselves, which would in turn be bought by the ECB, which just further inflates their balance sheet. This is not an improbable outcome because inflation rates are still very low.
- raesene9 11y agoI think financially you could be right, and perhaps if this had occurred 6 months ago, it could have flown politically. The challenge with that approach would seem to be that politically in several Eurozone nation there's been a hardening of sentiment around this and so even if the leaders of those nations want to do that kind of deal, they may have a tough time convincing their own parlaiments..