Earlier this week, as the chances of a pro-bailout Greek coalition fell apart, you would think that the failure to cobble together a coalition was tantamount to Greece withdrawing from the euro and reintroducing the drachma.
Sure enough, signs of a “bank jog” emerged this week, as Greeks pulled out over €1.2 billion in deposits from Greek banks on Monday and Tuesday amid the political tumult. An article in Der Spiegel declared that it is time for Greece to leave the euro and even Christine Lagarde, managing director of the International Monetary Fund said that, although it would be “quite messy,” it is time to start thinking about how to engineer a Greek exit from the euro.
But with an interim caretaker prime minister, Panagiotis Pikrammenos, being sworn in today, and new elections scheduled for just over a month from today, the warnings of Greece’s immediate exit from the eurozone are extremely overblown. Continue reading Worries about Greece’s immediate eurozone exit are extremely overblown