Here’s what I would do if I was running Greece right now…
- I would vote “no” vote in the recent Greek referendum.
- I would move to abandon the Euro and re-adopt the Drachma as the national currency.
- I would stay in the European Union.
- I would print money and use inflation to solve the government’s internal debt problems.
- I would use my country’s now-improved negotiating position via threat of complete default to get our external creditors to restructure our debt on terms favorable to Greece.
There is no “happy” outcome for Greece right now. The choice is between dysentery and amputation. To leave the Euro would be to suffer a crippling dysentery that would leave the country crippled over and in deep pain for months. To stay in the Euro would be to willfully amputate one of the country’s limbs, making Greece forever an economic cripple.
I choose dysentery, because it is the only path of hope, however grim.