Kicking Greece Out Ain't That Easy

Only 25% of Germans think Greece should remain in the Euro or receive further additional EU support, according to a Financial Times/Harris poll. Holding opinions unburdened by the need to implement them is an indulgence afforded voters in all democracies. It feels good to punish the tax-dodging Greeks by kicking them out. But if instead these same German voters were asked if they’d contribute perhaps 300BN Euros towards the probably 1 Trillion that would be requires to support Italy and Spain if Greece leaves the Euro, they would probably reject that as well. This is the unpalatable reality no doubt well understood by Germany’s decision makers. In any case, public opinion was against giving up the Deutsche Mark in favor of the Euro as well, but opinion polls don’t necessarily drive political decision making in Germany. For Europe’s biggest economy, keeping Greece in the Euro is unfortunately probably cheaper than kicking them out.

Greece may wind up leaving, but if that turns out to be the best of available options then the future for EU growth will be pretty bleak.