[Obsidian]

Many people think that Greece will default this year. Do you think the same?
If yes, what will be the consequences? Will it lead to a stronger euro? or will it lead to collapse of the eurozone?

[khamore1]

Greece was admitted to EU by fraud, their departure will not cause any long term

damage , on the contrary it will strengthen them

[Obsidian]

Would Greece want to leave?
If they leave or get kicked, how would that affect other countries fighting with the same problems?
How about the countries, banks, investors that lent tons of money to Greece?
Will that start a big chain reaction or will hopes keep the united europe dream alive?

[MightyMouse]

Originally Posted by Obsidian »

Would Greece want to leave?
If they leave or get kicked, how would that affect other countries fighting with the same problems?
How about the countries, banks, investors that lent tons of money to Greece?
Will that start a big chain reaction or will hopes keep the united europe dream alive?

Don't despair. A Greek default is already priced into the picture. The banks are determining the haircut they are going to have to take.

All this fun will lead to more government in Europe and abroad. More govt means more taxes.

Times will certainly get better and then they will taper off again. When they do taper off the added tax burden will make this recession look and feel easier. So enjoy yourself while you can because these will be the best hard times we will have for a long time.

[Obsidian]

I agree that a Greek default is already priced in...I just feel the reasons for the union are political, rather than economical...I can't imagine a fiscal union...The countries involved in the euro are far too different to be under the same monetary policy...For example it makes sense to combine the Netherlands and Germany...But Germany and Greece/Spain/Portugal are completely different worlds...

[Tams]

the Germans will pay for it one way or another:

1. continue to have cheap vacation, (ie bail them out)

2. pay for more expensive vacation. (ie let them default)

[Obsidian]

I am happy that I am not a German
French elections will be in this year and German elections in 2013. How will they affect the policy?
I would like to hear thoughts of the people living in the eurozone.

Here in Thailand I meet European people who come here to work and most of them say Europe is a mess...

[daVinciLite]

The Euro was never workable in the first place. It came form the minds of elitist who know nothing of the real world. As long as the leaders in Europe can keep hope alive, the market place will keep hope for the future of the euro – it’s just too painful to face the truth. But sooner than later the Euro as we know it will come to an end. At a minimum the PIGS will be thrown out. Then we can go along our merry way once the world takes its medicine.

This audio link should help you understand the situation:

Cowen on the European Crisis | EconTalk | Library of Economics and Liberty

dVL