Grexit: It’s a question of how, not if, Greece will leave the euro

Over at Foreign Exchange, I’ve got a post up on the euro. Short version: all signs now point to a Greek exit, and Christine Lagarde has given a statement indicated there is no turning back.

It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time.

“That’s right.” She nods calmly. “Yeah.”

And what about their children, who can’t conceivably be held responsible? “Well, hey, parents are responsible, right? So parents have to pay their tax.”

That fits entirely with the strict language she used when I interviewed her in August:

She knows this is a tough sell. “You first have a period [after making cuts] where growth takes a hit and goes negative”—and with that come unavoidable human costs in lost jobs and social services. Political feuding over controversial cuts will only make the pain worse. How should ordinary people cope? She pauses. “It takes courage.”

What are the implications of this tough stance:

Hypothetically, should Germany refuse to loosen the terms of its loans to Greece, the IMF could offer a bit of rope on its loans to Greece that would allow a left-wing Greek government to save face without upsetting the eurocart. But. as those of us who have followed her closely expected, Lagarde has unequivocally squashed that possibility in her remarks tonight.

Read the whole post here.

Fresh Thoughts on Aid

I’ve got two posts up today on ‘out of the box’ thoughts about aid. Namely, the push for a more political/human rights approach, the push for a financial transactions tax, and the push for more reliance on public pressure and social media awareness campaigns. Me, I’m in favor of the first two. I’m also pretty seriously impressed by the two pols who made those arguments, Angela Merkel and Bernard Kouchner. Merkel for her ability to take what is actually a left-wing idea and fit it into a center-right argument. Kouchner for his astounding rhetorical gifts–I’ve never seen anyone own a press pool that way. I particular enjoyed when he told one reporter that she was asking a ‘non question.’ You can enjoy his witticisms here.

As for the third, everyone here will already know that I’m a skeptic about digital democracy. So I won’t repeat myself, just refer you to the interview.