Thursday, April 16, 2015

Compromise With Greece in A Fair and Reasonable Manner; Otherwise, Deal With A Huge Earthquake in the Eurozone.


The IMF, EU and the European Central Bank (Troika) should patiently compromise with over-indebted Greece in a very fair and reasonable manner. If Troika would repeatedly reject Greece's proposal in this matter, there is high probability that the country would apply for default and consequently would also exit from the EU. Such an event would inevitably cause a huge earthquake in Eurozone and consequently in the whole world. So this is the story.

Exiting Greece from the EU would undoubtedly mobilize tens of millions of people across the EU against the current political, social and economic status quo; tens of millions of European citizens, who are fed up with overall austerity measures, unemployment, weak economic growth and huge inequality in different terms. Such a chaotic environment, would facilitate a perfect ground for two main political parties across the EU: 1- Radical Right Wing Parties and 2- Radical Left Wing Parties, to easily lead their citizens in every direction they want; two main political parties, which both have one common main goal: Exiting from the EU.

We should bear in mind that Greece is not the only country within the EU that suffers from heavily debt and severe austerity measures. Other countries such as Italy, Portugal, Spain, etc within the EU are also suffering from the same problem as Greece. To put it simply, if Greece would exit from the EU, there is high probability that other countries such as Italy, Spain, Portugal, etc, as a result of domino effect, would follow the path of Greece and would exit from the EU, based on the mandatory demands of their citizens.  

Such an event is equivalent to the total collapse of the EU and Eurozone. Should this happen, the economic crisis in the EU would inevitably drag the whole world into another deep global economic depression for many years to come.

Based on brief explanation noted above, thus, it would be wise and beneficial for Troika to compromise with Greece in a very fair, reasonable and no-greedy manner. In addition, Troika should pay attention to the notion that we are not living in the 60s or 70 and IMF, WB or EU Central Bank are not the only existing International Financial Institutes in the world. In sum, Troika should pay attention to the overall negative consequences of a no-deal with Greece. As an old proverb says: Those, who live in glass houses, should not throw stones. In other words, do not underestimate Greece. Over-indebted Greece can cause a huge global earthquake beyond the will and power of every strong local, regional and global authority. This is what i predict for the future in case of a no-deal with Greece.

M. Sirani                                       16.04.2015

Note: I have warned about this issue in some of my previous short notes as well.