The rising threat from Greece

[GliderGuider]

The rising threat from Greece

Perhaps the bigger problem could be the reaction of the people in Milan or Barcelona. They will watch people in Athens lining up at banks in a futile effort to get euros. They will see lifetimes worth of savings in euros replaced with devalued drachmas. They may learn a lesson: Moving money out of a teetering country's banks is a very inexpensive form of insurance against financial ruin, and better done sooner rather than later. If they do learn that lesson, we could see bank runs. Unlike Greece's, Italy's and Spain's economies are big enough to matter, and such runs would be hard to survive.

Even in the absence of financial contagion, Greece's crisis poses serious political problems. It is not obvious whether Greece could stay in the European Union while departing the euro. If it stays in, it would hold a great deal of leverage over EU actions that require consensus — such as maintaining sanctions on Russia. If it leaves, then Europe has a potentially failed state on its southern flank.

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1. Tribune op-ed, Republican news source. Aside from that,

it requires a subscription - do you have a non-subscription link?

[GliderGuider]

2. Odd, mine doesn't require a subscription

I just have to decline the offer of complimentary access, and I get the article.

The possibility of bank runs in Spain and Italy seems serious enough.

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3. Okay, I actually got a link through Google, and read it.

I'm not agreeing with this Levy guy's assessment - I think Greece will have others who are willing to step in should the Troika try to get all tough love on them.