Europe is now drawing up plans for something that was unthinkable just a few months ago – the departure of Greece from the Eurozone. As Greece prepares for elections next month that will likely give anti-austerity parties control of the government – putting further bailouts in jeopardy – European nations are quietly drafting plans to mitigate the economic pain from a Greek default and exit.
While most of the planning is on the hush for fear of leaks, Reuters is reporting it has seen memos drawn up by Eurozone member states outlining what each nation should consider following a Greek departure. The memo outlines plans for the EU and the IMF to give Greece a $50 billion life-line to ease what will likely be an economically devastating exit from the euro. Also included in the memo is a warning that “markets will definitively distrust the euro,” after Greece leaves, which could lead to economic damage for other Eurozone members and even the United States.
This mess was created by the banks more than a decade ago when they cooked the books to make Greece even eligible to join the euro. It was a mess that was made worse by the banks when they triggered a global financial meltdown in 2008. And then it was made even worse – again by the banks – when they demanded austerity instead of pro-growth policies to get out of the recession. Now here we are – on the economic precipice – and the banks are still not being held to account.