Saturday, May 19, 2012

Jeffries Economist Says Pay Greece to Stay in Euro

I'm working through Jeffries' most recent Economic Insights published by Ward McCarthy and his group. In it there's a quote from Marchel Alexandrovich, an economist in the International section of Jeffries, which is somewhat tongue in cheek, but nevertheless on the money.  In speaking to the Guardian, Alexandrovich says that Greece should be persuaded "and paid to stay in the euro, which would be much cheaper than the alternative."  The alternative it seems is more than $500 billion in foreign debt which could at worst be repudiated or more likely written down dramatically. 

This is another way of coming at our conclusion about the Greeks having the upper hand at the weekend. On the other hand, just cutting more ECB checks to Greece buys time, but really doesn't resolve the problems.  There are lots of very sharp Greek economists on faculties around the world, and it wouldn't surprise me if they weren't being summoned by Greek technocrats to help Athens think through the mechanics and costs of a euro exit.  Stay tuned. 

Photograph: Yorgos Karahalis/Reuters

By the way, isn't the drachma a classic, timeliness design? 

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