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Spiegel: Let's All Prepare for a Greek Exit

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Greece will go bankrupt after paying the International Monetary Fund 460 million euros and Europe must prepare for a Grexit, a Spiegel analysis says.
According to commentator Wolfgang Munchau, Greece’s payment to the IMF will probably leave state coffers empty and Athens will not be able to pay salaries and pensions.
Munchau argues that in the next two or three months it will be impossible for Greece to find new funding. The Greek government has borrowed from pension funds and bank reserves to meet its financial needs but such funds will eventually be depleted.
In May, or July at the latest, Greece or creditors, or both, must back down. If that doesn’t happen, then Greece’s exit from the euro zone will be inevitable. So, we must all be prepared, Munchau says.
Greece’s exit from the common currency bloc will not only hurt the European banking system but it will also have geopolitical and economic repercussions. The humanitarian crisis in Europe will get worse, also.
The writer suggests that since the Greek debt is not sustainable, a generous haircut will be the best solution for all. It may cost Europe a few hundred billion euros, but the potential damage a Grexit will cause will be more costly.
Parallel to that, a new currency for Greece would be a solution. Munchau suggests a “Greek euro” — not the drachma — that will be used inside Greece only and the regular euro for outside Greece. This way Greece will remain in the euro zone and would be relieved from the burdens of the debt and interest rates. The country would be free to choose its economic policy and the Greek economy would restart with the aid of European partners.
In other words. Munchau says, Europe must accept a unilateral haircut debt. If Greece declared itself a unilateral debt cut, then no one can do anything about it.
From then on, Greece can decide what to do. It either returns to the euro zone after a period of a dual currency, or converts to the drachma and incorporates the new currency in foreign markets. This way, the Bank of Greece will again become a true central bank and not the Greek branch of the European Central Bank.

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