The Eurozone Greek Tragedy

Abstract

The eurozone is losing its glamour and is in danger of losing its appeal as the promise of perpetual prosperity fades away. It is no longer the eurozone that might draw people to defend it on barricades. While there was solidarity with Germany in 1953 when its huge debt was written off by a half, such solidarity is not currently on the table for Greece and southern eurozone countries. Scenarios for the future include three possible paths: the eurozone may move towards a stronger federal structure; the current agony may continue for several years until it becomes unsustainable; or it may fall apart, the fate of the majority of Europe’s past monetary unions. Preparations for the post-eurozone Europe are necessary.

Keywords: Germany, France, Greece, eurozone, growth, breakup, solidarity

JEL Classification: F31, F33, F36