It’s like ‘cry wolf’, isn’t it? Greece seems to have been in imminent danger just about every day for the past four years. The headlines cry out Greece’s pain. One wonders how one country can remain in such a state of depression for so long.
Waiting for Grexit
‘We do what we can’, is the mantra. Every month we reach a new eleventh hour; a new last minute deadline. We have been waiting for Grexit. But it never comes.
You see, just as a country can remain in a permanent state of boom, or a permanent state of recession, it can remain in a permanent state of crisis.
In fact, that is actually a good way of dealing with crises. You just wait. Gradually the cries of anger and anguish fade, until all you are left with are the echoes. A few years down the line, the Greeks will wake up on one of those clear blue sky mornings that are so common in Greece and realise that the crisis is actually over.
This was what I, as a UK investor, was hoping for. We just must make sure that it doesn’t reach the stage where the Greeks are in a blind rage and decide to leave anyway. That seemed to have happened yesterday.
Greece’s Prime Minister Alexis Tsipras announced a referendum this Sunday, which is basically a referendum on whether or not Greece should remain in the Eurozone.
It’s different when you see Grexit in the whites of its eyes
Surely now, we thought, it is over. The fat lady was taking a deep breath. Greece would be leaving the euro. However, it seems even at this late stage there is a strong likelihood Greece will pull it out of the fire.
Europe has realised just how dangerous and destabilising a Greek exit would mean for Europe, and particularly for Greece. The country would have been locked out of the financial markets; tens of billions of euros would be lost. It would take years for the country’s finances to thaw. And stock markets would tank (they are already falling). The pain would be intense.
So the Greek government has requested a new bailout deal from the eurozone, just hours before its bailout expires and it must repay €1.6 billion to the International Monetary Fund.
Eurozone finance ministers will discuss the Greek proposal in a meeting on Tuesday evening. And my hunch is (no one of course knows), that Greece will survive once again.
You see, it is one thing to say you want Greece to leave the euro, but it is quite another to walk towards a disaster which is staring you in the face.