|Date: 16/05/2012 Time: 10:24:00 AM
Greece has turned into a morsel which is stuck
in the throat of Europe. It can neither be swallowed nor coughed out.
Intense debate is now raging in Europe whether Greece should stay in the
eurozne or exit from the 17-member single-currency club.
Analysts opine that the country cannot survive without the euro, but on the
other hand Europe cannot afford to let it leave the eurozone.
May 6 elections in Greece produced a fragmented result which has
intensified the political crisis .
The two leading parties, the conservative New Democracy and the socialist
PASOK, which had signed the austerity package with the EU and IMF in exchange
for massive loans, suffered humiliating defeat at the hands of the voters.
Coalition of the Radical Left (SYRIZA) as well as other anti-austerity
political parties are arguing that that the elections outcome is proof that 68
percent of Greek voters reject the terms of the EU-IMF bailout.
Greece is heading for new elections, most probably in June, after party
leaders failed to agree on the formation of a coalition government.
SYRIZA is trying to convince the Greeks that they can reject the austerity
measures and still stay in the euro because Europe will not throw Greece out.
Europe itself is sending mixed signals. European politicians insist that
Greece will remain in the Eurozone,
Eurogroup Presdient Jean-Claude Juncker rejected speculations on a Greek
exit from the eurozone as "nonsense and propaganda."
French President Francois Hollande and German Chancellor Angela Merkel in
their first meeting in Berlin Tuesday underlined their desire to see Greece in
However, the European press takes a different view.
The German weekly magazine Der Spiegel ran a front page story with the
headline: "Acropolis, Adieu! Why Greece must leave the euro".
British daily The Telegraph published a front page story titled "Greece on
brink of collapse as Europe prepares for messy exit."
Greece accounts for only two percent of the eurozone's economic output and
hardly has any economic or political influence in the European Union so its
exit would not be such a disaster for the 27-member bloc.
However, a Greek exit would not only be a big blow for the monetary
integration process in Europe but also to the prestige and image of the
European Union as a whole.
Moreover, if Greece leaves the euro zone it will set a very dangerous
precedent which could cause a chain raction and lead to the collapse of the
Which country will be the next to follow , financers and creditors all over
the world will ask. Will it be the turn of Spain, Italy or Portugal, which are
also facing debt crisis, to leave the eruozone.
The Spanish daily El Pais commented that "the spectre of a Greek exit from
the Eurozone has once again been raised by the political crisis in Athens: a
scenario that is all the more dangerous for Spain, which is now more
vulnerable, and one whose consequences would be geo-political as well as
Analysts opine that the next elections in Greece will be considered as a
vote for the future of the country. Voters will have to decide if Greece wants
to stay in the eurozone or go back to its former currency the Drachma.
The big question is that if the next elections do not resolve the Greek
crisis, what then??