Thursday, September 08, 2011

Euro Pickle

Prof. Drezner had it right while talking about Euro. So this post is a minor update in the ongoing saga. In a way blogging about Euro and Europe is easy, hardly anything changes substantively! It is the same old set of problems while European leaders continuing to go in circles.

Today's news is how formal political apparatus in Europe is making the noise about 'unsolvable knot called Greece in Euro'. If it were about Greece only, Europe and World would have found it cheaper to help Greece on humanitarian grounds after it had existed Euro. But exit from Euro is not only difficult for legal reasons, it is a question of what to do with Greek debts on balance sheets of European banks which are already very weak. In other words, only when German, French and other European banks feel okay to absorb Greek loan losses fully and their political bosses are convinced off that; exit of Greece from Euro will actually take place. Till then, Euro pickle will continue to marinate. 

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