Greece kept out of the Euro

I assume that in 2009 Papandrou would have devalued and rightly blamed the previous administration. Greece would be healthier.

I wonder how much Greece's experience made it easier to push regressive austerity programmes on other states.

I also think that the Greek crisis had a big impact on to 2010 UK election, helping conservatives and damaging Liberal Democrats.

Anyone disagree?
 
If Greece had stayed out of the Euro currency, situation probably wouldn't be as bad. One of the problem is that they were able to borrow money at lower rates on the back of the Eurozone perceived stability.

Maybe contagion wouldn't have been as been as well?

Crisis in the non-EUR EU countries seem to have little impact on the perceived stability of the EU, look at the problems in Hungary for example
 
Euro would be on much better condition. But some problems are still coming when global decession begins on 2008. And Italy, Spain, Portugal and Ireland are still on Euro. Even Greece would be on better situation when it can fix its own problems with its own currency.

And politically there probably wouldn't be continental wide rising of conservative/nationalist parties.
 
Well, if Greece was kept out of the €, then . . .

*Greece would have put up a big stink about not being part of it, even if it didn't meet all the qualifications, claiming accusations of racism and the like. The ECB and other would have to have huge cojones to basically explain to Greece (and this would be around 1999-2002, mind you) that it does not qualify for joining the Euro since it does not meet the convergence criteria, as was the case in 1999. In which case Greece would be in a similar situation to Sweden or Denmark - however, on the other hand, Sweden has deliberately chosen to fail the convergence criteria, and Denmark got an opt-out from joining the euro, so who knows?

*However, having said that, I don't think that being outside of the euro during the financial crisis would have helped Greece one bit. Even if Greece did not join the euro, the drachma would still be pegged to it (as it had been since 1996) and thus many of the same problems with Greece in the eurozone would have happened if Greece was outside it. So, OK, we get a repeat of the Argentina scenario in the Balkans - but it would be ten times worse, IMO, and I don't think devaluing the drachma would help one bit. In fact, due to the fragility of the Greek economy, devaluation would only worsen the crisis.

My view, at least.
 
Well, Greece would be in the same situation as Denmark, in that their currency would be pegged to the Euro as part of ERM II.
(This is what certain economists miss in this-the European countries didn't go free floating->Euro, but from fixed currencies bound in ERM).
This would mean that they wouldn't be able to devalue significantly unless they remove the peg...
I don't see that happening unless it's after a very hard fight against speculation...
I mean, even right now, Denmark is still defending their peg, and they got the backing of the ECB's reserves to do so, meaning that it's unlikely that the unpegging would happen...
So maybe Greece would still be defending their peg like Denmark is now, or we get a Greek equivalent to Black Wednesday where Greece crashes out of the ERM like the UK did, which would still be better than OTL as they could devalue their currency...(though devaluation may not be a panacea if significant transactions aren't done in one's own currency, like in Croatia).

The other "PIIGS" countries would have the same issues, but it may be less contentious because there was quite a bit of pre-existing ill-will towards Greece before the crisis occurred, what with the whole Macedonian name issue, their willingness to veto the 2004 expansion in exchange for letting Cyprus in, and the sense of "buyer's remorse" of letting Greece in "too early" (as their entrance was approved by the Council against the Commission's recommendation).
Though I still think there would be contentions...and ironically maybe Greece would complain of having to bail out say, Portugal!
 
If Greece was outside the Euro, the Euro would be stronger than it currently is, and Spain, Portugal, Italy, Ireland etc would be in worse shape.
 
If Greece was outside the Euro, the Euro would be stronger than it currently is, and Spain, Portugal, Italy, Ireland etc would be in worse shape.

Why assume that? Ireland and Spain were banking crisies that have for the most part passed, you could argue that maybe Ireland's export figures might be different but then the import costs of fuel would be as well due to the strength against the dollar.
 
If Greece was outside the Euro, the Euro would be stronger than it currently is, and Spain, Portugal, Italy, Ireland etc would be in worse shape.

Why they would be worse? Ireland and Portugal have even solved pretty much their problems and Spain and Italy have too probably made some fixing. And if these countries would be even worse than OTL how Euro could still be on better condition than OTL Euro?
 
The Greek crisis would still have happened. They would have the same basic problems that you have in any socialist /welfare state: an unsustainable retirement system, 100,000’s of able bodied people claiming that they are disabled to get a government check, and a bloated government bureaucracy that cannot be sustained. If they did not have regular infusions of Euros from outside the country they will would seizing all the private bank accounts and safety deposit boxes instead of everything over 8,000 Euros.
 
Type in Google Search: "What if Greece never joined the Euro?" There are 1,230,000 results. The top three are by Business Insider, Bloomberg and The Economist answering exactly your question.

Suffice it to say practically every economist under the sun has written a response to your question, I doubt many people on AH.com can do better.

Whatever the case, I am glad I don't live in Greece!
 
The other thing is that if the EU is telling Greece 'you can't join because of the convergence criteria', and Germany and France are both violating the 3% deficit rule (i.e. not meeting the criteria themselves), its going to have one of a few possible effects.

1) it damages the Euro, because the core countries are being blatantly and visibly hypocritical.

2) it forces the Germans and French to do something about their deficits. Or possibly the arrangement is that they pay (a probably reduced) fine as they were supposed to. This strengthens the idea of the Euro as a zone where people actually have to play by the rules, or there are consequences.

3) it damages the Euro, because clearly the convergence criteria are only for new comers, and the Italians, Spanish and French ignore the rules even more. Probably Greece joins a few years later, 'cause, hey those rules don't really matter, anyway.
 
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