But Germany could always make an offer no one could refuse!
Sir Martin Wolf in “China and Germany unite to weaken the world economy” March 17, writes that “Since… Germany… has no chance of expelling any member it disapproves of from the eurozone it would have to leave itself”.
I am not at all sure about that. Germany could always make an offer to Greece and to Greece´s creditors that no one could refuse, especially if things go from bad to worse.
Germany could for instance guarantee 20 percent of Greece current debt in Euros if creditors are willing to convert the remaining 80 percent into New Drachmas at reasonable rates and with reasonable maturities. This would allow Greece to devalue and perhaps even keep the option of returning to the euro-fold at a more propitious moment.
I am not at all sure about that. Germany could always make an offer to Greece and to Greece´s creditors that no one could refuse, especially if things go from bad to worse.
Germany could for instance guarantee 20 percent of Greece current debt in Euros if creditors are willing to convert the remaining 80 percent into New Drachmas at reasonable rates and with reasonable maturities. This would allow Greece to devalue and perhaps even keep the option of returning to the euro-fold at a more propitious moment.
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