Policy Notes No.7 18 June 2012

The Greek Crisis

Possible Costs and Likely Outcomes of a Grexit

C. J. Polychroniou

The European Union’s (EU) handling of the Greek crisis has been an unmitigated disaster. In fact, EU political leadership has been a failure of historic proportions, as its myopic, neoliberal bent and fear-driven policies have brought the eurozone to the brink of collapse. After more than two years of a “kicking the can down the road” policy response, it’s a do-or-die situation for Euroland. Greece has reached the point where an exit looks rather imminent (it’s really a matter of time, regardless of the June 17 election outcome), Portugal is bleeding heavily, Spain is about to go under, and Italy is in a state of despair. This Policy Note examines why the bailout policies failed to rescue Greece and boost the eurozone, and what effects a “Grexit” might possibly have—on Greece and the rest of Euroland.

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The Greek Crisis

Possible Costs and Likely Outcomes of a Grexit

Research Topics

Associated Programs

Related publications

Greece: Time to Reduce the Dependency on Imports

Euro Interest Rate Swap Yields: A GARCH Analysis

Unconventional Monetary Policy or Automatic Stabilizers?

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