With the Greek referendum now off the table, it looked like Greece will continue to be in the eurozone for awhile. I believe it would be better for Europe, Greece and the rest of the world if the Greek get out of the Euro now!
Now I understand why European leaders have been trying hard to keep Greece in the eurozone. If Greece goes, it would be chaos on the global economy. Greece would have to default on its debts and European banks who lend Greece their money would be unable to get their money back. That was the main reason why banks agreed to accept a 50% loss on Greek bonds in the latest bailout package. Also countries who had funded the earlier bailouts, the ECB (European Central Bank) and the IMF (International Monetary Fund) can all forget about getting back the money they lent Greece.
Guess what? Even if Greece enforce all the austerity measures they agreed to; even if China and Japan suddenly decide to help bailout the eurozone (not bloody likely in my view); even if there is no more financial crisis of any sort in the world for the next 10 years; Greece could still default!
Frankly the bottom-line is this; Greece is bankrupt. That’s just the long and short of it. Greece is bankrupt and it is hurting the rest of the Euro nations with its presence in the group. Just the fears of a Greek default caused Italy's borrowing rates have jumped to record levels, and that is a big problem because Italy’s debt is much greater than Greece. This is also the reason why I think it would be better for Greece itself if it get out of the eurozone. There is a real chance that Italy, Ireland, Portugal, and Spain would default sooner or later. If just one of these countries default, Greece would be affected as well if it was still in the eurozone.
For the rest of the world…I don’t think I need to go into how it would help the rest of the world if Greece goes right?