European Future

Forget Grexit

Greek coins dpa DISTORTED
Talk of Greece ditching the euro is unhelpful.
  • Why it matters

    Why it matters

    If Greece left the euro zone it would set a precedent for Europe, and highly indebted countries could again spiral downward.

  • Facts

    Facts

    • In a landslide victory, the leftist Syriza party won early elections in Greece last Sunday.
    • Greece was in recession for six years until achieving minimal growth of 0.6 percent in 2014.
    • The country needs a credible fiscal plan that sets a debt quota of 60 percent of GDP, says the author.
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    Audio

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Greece has held its elections, and things are not as bad as forecasters predicted. The leftist Syriza coalition emerged victorious on its anti-austerity platform and Western civilization has not collapsed.

The election results demonstrate, however, that the euro zone needs new mechanisms to survive over the long term.

Early elections are actually not uncommon in the parliamentary process. In Germany, they last occurred in 2005. But when the Greeks vote, alarm bells go off. The wrong party just might win.

Now that has happened and the “wrong party” Syriza has won, some financial policy hardliners are demanding that Greece exit the euro zone. Commentators have even come up with a term for the scenario – “Grexit” – though it is utterly unrealistic.

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