The problem is the chain of events that could be unleashed if Germany and others mismanage the consequences of a Syriza victory.
In particular, Angela Merkel may well believe that the rest of the euro zone is now sufficiently insulated from the consequences of a Greex exit from the euro. And she may be right. But she may be wrong too. A Grexit would set a precedent, and markets may sense Spain's future in the euro is no longer assured. Much will depend on the way the game will be played by all sides and on market psychology. Which means there is huge uncertainty about the outcome.Dani Rodrick's Weblog
Greek elections, democracy, political trilemma, and all that
Dani Rodrick | Albert O. Hirschman Professor in the School of Social Science at the Institute for Advanced Study.
3 comments:
Would the Euro Zone be workable with a central bank dedicated to countercyclical policy, unlike the current ECB? Say, with the easy ability to put money directly into the pockets of every European citizen?
You mean if the ECB became a unelected government and started doing fiscal policy?
Would we need to organise a Triumph for Mario Draghi through the streets of Brussels as well?
Or would it be more appropriate in his home capital city of Rome?
Be careful what you wish for...
Well, I thought that fiscal policy meant spending money. Which giving it away would not be. :)
As for being an unelected government, the ECB already is.
Sorry, your comments are too cryptic for me to get your point about being careful what I wish for.
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