Opinion
Greece Has Two Options: A Deal or Chaos
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By Nicholas Economides
With only days to go before Greece is unable to pay its external loan obligations, some argue that a Greek default within or outside the euro is the best outcome. But no matter how mediocre an agreement is for Greece, a deal of any sort is better than bankruptcy.
The newly elected Greek government missed its unique opportunity to sign an agreement earlier this year that might have been "better" than the one proposed to the conservative government originally. It lost this opportunity because first, the Greek government did not have ready a program that could be implemented, and second, it preferred to speak in a revanchist manner about Germany to the gallery of its left platform, rather than to its European partners.
During the four-month ongoing negotiation, the Europeans toughened their position, noticing that Greece was often off-subject. When Greece and the Europeans could not reach a deal based on the technical analysis of the data, the Greek government spoke of the need for a "political negotiation." When the prime minister could not reach a deal with his counterparts, the negotiation was restarted from scratch at the technical level. And this cycle was repeated again and again. Four months passed this way.
Read full article as published by CNBC
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Nicholas Economides is a Professor of Economics.
The newly elected Greek government missed its unique opportunity to sign an agreement earlier this year that might have been "better" than the one proposed to the conservative government originally. It lost this opportunity because first, the Greek government did not have ready a program that could be implemented, and second, it preferred to speak in a revanchist manner about Germany to the gallery of its left platform, rather than to its European partners.
During the four-month ongoing negotiation, the Europeans toughened their position, noticing that Greece was often off-subject. When Greece and the Europeans could not reach a deal based on the technical analysis of the data, the Greek government spoke of the need for a "political negotiation." When the prime minister could not reach a deal with his counterparts, the negotiation was restarted from scratch at the technical level. And this cycle was repeated again and again. Four months passed this way.
Read full article as published by CNBC
___
Nicholas Economides is a Professor of Economics.