Grexit in 2015

What if Greece had exited the Eurozone in 2015? After they voted 'Oxi' in the bailout referendum, it seemed pretty likely. What would have happened? How would the world economy have been effected? What if?
 

Ian_W

Banned
What if Greece had exited the Eurozone in 2015? After they voted 'Oxi' in the bailout referendum, it seemed pretty likely. What would have happened? How would the world economy have been effected? What if?

The Drachma drops in value by 30%. Greek holidays and shipping become cheaper. Greece recovers. Its debtors get repaid in New Drachma.

Nazis stop being elected in Greece as recovery happens.
 
The fact that Greece didn't exit despite Syriza's best attempts suggests that exiting the Eurozone isn't as trivial as Varoufakis et al portray it.
 
The Drachma drops in value by 30%. Greek holidays and shipping become cheaper. Greece recovers. Its debtors get repaid in New Drachma.
One problem with that is that in the initial bailout a decent chunk of the debt was restructured under English law, and so the Greek government would have had to pay those bonds in Euro's - or pay M'learned friends large sums of money to argue that they should be paid in New Drachma, and then pay in Euro's.
 
This should go into future history, wrong section!:p

If Greece steps out of the eurozone the question is: Who is next?
 
I doubt there's any way to get a good answer to this, at least not in detail. A big part of the reason it didn't happen is because no-one had a clear idea what the consequences would be, or even how it could be practically done, and really didn't want to find out. I suspect some of the medium-to-long term results would have been:

A domino effect (starting with Italy) of capital flight, followed by Cyprus-style capital controls, followed by a reversion to national currencies;

A collapse of some of Germany's largest banks as their Greek debt holdings evaporate, followed shortly by a collapse of the German government;

Europe plunged into a recession that makes 2008 look mild, which combined with China's slowdown will push the global economy into full depression;

A reduction in the number of Syrian, Iraqi and Afghan refugees coming to Europe as it becomes less attractive, but a large increase in the flow of Greeks northwards as their country implodes, with no money for imports and locals paid in a rapidly inflating currency that's not worth the paper it's printed on.

Over the next few years, a further rise of nationalist/populist governments pushing a sovereignty agenda that sees the EU break up (incidentally making Cameron's renegotiation irrelevant, assuming he even bothers to try it).

Basically, I'm not seeing an up-side here.
 
One problem with that is that in the initial bailout a decent chunk of the debt was restructured under English law, and so the Greek government would have had to pay those bonds in Euro's - or pay M'learned friends large sums of money to argue that they should be paid in New Drachma, and then pay in Euro's.

In such a case, Greece would just outright default, and a humanitarian crisis happens. Refugees pick another country, or flood into Europe through Greece entirely.

Europe goes into recession due to knock-on, but it is contained, Merkel gets toppled, US growth slows slightly , gas prices lower.

It would be a sticky situation, but probably better for Greece eventually than OTL.
 
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