The EU's Greatest Fear Over A Greek Exit

It appears more and more likely that Greece may exit the European Union--at least to the extent of jettisoning the Euro. However, Daniel Hannan writes that the worst prospect for the EU would be if Greece did so ... and succeeded. Hannan explains:

The past six years have seen a greater depression in Greece than that of 1929 to 1935. Output is down by an almost unbelievable 25 per cent. A quarter of all Greeks – half of all youngsters – are unemployed, and tens of thousands more have emigrated in search of jobs. 

Mr Tsipras talks of the policies that the EU has forced on Athens as ‘fiscal waterboarding’ and you can see his point. 

Middle-class Athenians can be found rummaging in bins. Farmers are bringing supplies to their urban cousins. On cold nights, a pall of woodsmoke rises, because people can no longer pay heating bills. 

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[A] default and devaluation would offer a fresh start. Although the economy has been pummelled by six years of Euro-austerity, some of the fundamentals have improved. 

The bureaucracy has been slimmed, taxes are now collected and, if debt repayments were taken out of it, the budget would be in balance. In truth, this is what EU leaders fear. Not that Greece will leave the euro and collapse, but that Greece will leave the euro and prosper. 

A competitive Greek economy, exporting its way back to growth, might inspire Spaniards and Italians, who have also been paying the price of the euro, to follow.