Apparently, today, Greece is to have an ultimatum, or is it a prenultimatum. No matter, the EU and the IMF and the Germans are really serious now and they are not prepared to put up with any more waffles. Or are they?
The biggest problem the Greeks and the Eurozone face is the fact that neither side is willing to really draw that line in the sand. The Greeks keep spinning and the EU types keep backing away from the possible calamity of Grexit.
The Greeks are counting on the theory that the Eurozone and the EU cannot withstand the possibility of Greece defaulting. Are the Greeks right? On the numbers almost certainly not. Greece is 2% of the overall Euro GDP. They owe something on the order of 150 billion Euros which sounds like a lot but much of that debt is hedged and much of it will be repaid. The European banking community has managed to transfer a lot of the Greek debt to the assorted government and quasi-governmental institutions. Sure, they will take a hit, but not a balance sheet busting one.
From the European perspective losing Greece would be sad but not quite on the order of losing Spain or Italy. The EU will continue, the Euro will survive.
In world terms, the Greek exit/default/bankruptcy is a buying opportunity. Mr. Cook has denied that Apple will buy Greece but that will not stop any number of hedge funds and sovereign wealth funds from stepping up and buying bits of it. And, if the Grexit results in a drachma worth pennies on the Euro it is a dandy bet that plenty of Germans, Brits and French people will be only too delighted to buy that Greek villa they were priced out of previously.
A fire sale is not likely to be politically popular in Greece, but there is not a lot which a government can do to prevent private transactions between consenting adults. Especially in a country where the law is breaking down.
From the world wide perspective, Greek default is unfortunate but a long way from tragic. From a Greek perspective, it is probably the only way out. The only people who are likely to suffer really nasty consequences are the Eurocrats whose mantra of “ever closer” will lie broken at the side of the road. I shall try to work up a tear, but I doubt I will succeed.