The Corner

Could Greece Leave the Euro? Cont’d

Daniel, rather than Greece dropping the euro, the simpler (relatively speaking) thing would be for Germany, the Benelux, Finland, Ireland and (I’d guess) France to quit the single currency. The “soft” euro that would result would almost certainly devalue sharply, giving the PIIGS’ export sector the break it so badly needs (that’s not something that would thrill the Germans, incidentally). One advantage of this alternative is that it might — just — allow Greece to avoid the default (and attendant cross-default problems) that would be the inevitable consequence of readopting the drachma.

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