Business Insider
May 21, 2012
Greece has once again returned to the spotlight as the driver of European woes.
However the recent freak-out that political catastrophe will actually result in a Greek exit from the euro is premature...for now.
Investors who seem convinced that this is the make-or-break-it moment for Greece are forgetting a number of simple lessons that we've learned from the European crisis so far.
The story goes that a win for the anti-bailout parties in the next elections on June 17th would make it impossible to pass the next round of austerity criteria demanded as part of the terms of the second Greek bailout—in particular, spending cuts for 2013 and 2014. From there, the troika of international lenders providing Greece with foreign aid would withhold payments, causing a hard default on Greek debt.
While it remains plausible that Greece could exit the euro currency one day, it is difficult to believe that next month will be the moment of truth.
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