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Hm. I am certainly no economist, but I'm still not 100% sure that I have any logical reason to agree that "it should prove good for the EU" for the EU+IMF to "bailout the problem states", or even that "it was in America's best interest to bail out the banks"... You say that "by bailing out Greece and demanding significant austerity measures, they are attempting to contain it locally", but doesn't the process of a group of nations bailing out a member nation (or, likewise, any multinational corporation), by definition, extend the problem beyond local/intra-national economics? Especially when a currency is shared among many disparate nations? What happens if/when a nation such as Greece decides that adhering to the Euro is more trouble than it is worth? The idea of a "a bitter, deep, cleansing period" I can get on board with -- most nations seem to be due for a fundamental economic/structural revaluation -- but like you said, not bailing out Greece could have dire 'domino' consequences, and doesn't leave much of a choice. But then, when Greece is bailed out, a nasty precedent is set, and what reputation/value will the Euro have when Spain or Portugal inevitably start to experience these very same issues? So, I guess I return to my original question: is it at all possible for Greece to play the "tank" and absorb most of the serious economic fallout from the present situation, or are the Greeks the canary in the global coal mine? Or am I presenting a false dichotomy? Also, you suggest in another comment that printing their own money would be a worse scenario for Greece -- why? Many countries do so, and I'd suggest that most of those countries have "profligate governments", but as far as I can tell aren't facing these obstacles to quite the same extent. |