New York Times
May 17, 2012
It is increasingly conceivable that Greece may leave the euro zone, not just because of its own political dysfunction but also because the consequences of such an exit for the rest of the Europe and the global economy no longer seem quite so scary.
The foot-dragging and brinkmanship of the last few years have won the other members of the currency union valuable time to prepare for life without Greece. Banks have recorded losses on Greek investments, companies are making contingency plans and Europe has bolstered rescue funds for other vulnerable nations like Portugal, Ireland and Spain.
Those measures also have reduced the risks for the United States, making it less likely that a “Lehman moment” will spread panic through global financial markets. American investment funds and banks have also sharply reduced their investments in Europe.
But some experts say Europe’s preparations remain incomplete and the potential costs of a Greek exit are highly uncertain and potentially substantial. That reality helps to explain why Germany continues to profess its determination to keep Greece in the currency union if at all possible.
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