Mark Weisbrot — How Greece Could Change the Future of Europe

Contrary to popular belief, the authorities do not fear that a Greek exit could cause a serious financial crisis of the euro. The ECB can create money like the US Federal Reserve, and has all the firepower it needs to make sure that a Greek exit would not cause serious damage to the eurozone financial system. ECB President Mario Draghi proved this in July 2012 when he brought an end to the financial crisis of the eurozone — and doubts about the survival of the single-currency bloc itself — by merely stating that he would do "whatever it takes" to defend the euro. The real fear is that Greece might leave the currency and, after weathering the flight of capital and an initial crisis, recover much more quickly than the rest of Europe, prompting other governments to also want to leave the euro. The entire currency union could be threatened. Bluffs and bluster fill the financial press at the moment, but the smarter people in Brussels and Frankfurt understand this reality, and will want to make some concessions to the new government in Greece. Either way, this is the beginning of the end of the eurozone's long nightmare.