Outside the marginals

a commentary on the politics that followed the UK 2010 & 2015 elections

Grexit: Wrong Problem?

In another of his periodic pronouncements Robert Peston ponders the possibility and impact of a Greek Exit from the Euro. His conclusion includes:

… an exacerbation of the Greek crisis would be an inconvenience for Britain. But by no means a disaster.

That said, the Treasury fears that Greek exit would be more damaging to the medium-term sustainability of the euro than most of the eurozone establishment apparently believes right now – in that it would prove the euro is not forever.

The euro would be turned into a glorified Deutschmark peg: speculators would have a big incentive to bet on who will be next to leave the currency; and history (the ERM for example) shows those bets can be self-fulfilling.
BBC News Website 5 may 2015 : How vulnerable would new UK government be to Grexit?

It’s the last paragraph that is the give-away.

… speculators would have a big incentive to bet on who will be next to leave the currency; …

And isn’t that the problem? The system makes the speculators more powerful than the states. Fix that and you fix the problem – unless you rely on speculators’ profits?

Is there any state (as opposed to political party) that does not recognise these speculators for the parasitic pariahs that they really are?

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