Grexit

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Grexit refers to a discussion about a hypothetical exit of Greece from the euro zone . It is a suitcase word from the English words Greek and exit . The Grexit was first discussed in 2009 and then in 2014 and 2015.

Related terms

In 2015 the possibility of a Grexit by Accident , Graccident or Grexident for short , was discussed. This term means an unintentional exit from the euro. Grimbo , short for Greek limbo , describes a situation in which Greece does not receive any further aid payments from its creditors and the situation does not resolve itself over a longer period of time.

The term Brexit stands for the departure of the United Kingdom from the entire European Union , which was initiated after the EU membership referendum in the United Kingdom in 2016 2017. For other countries in which a possible exit from the euro zone is being considered, there are analogously formed terms: for Germany Dexit , for Austria Öxit , for Finland Fixit , for France Frexit and for the Netherlands Nexit .

Prehistory and background

Grexit scenarios

Plan Z

Plan Z is the name of a plan drafted in 2012 that discussed how Greece could exit the euro area in the event of the collapse of the Greek banking system. A total of around two dozen people (employees of the European Commission, the ECB and the IMF ) worked on the plan . They were led by Jörg Asmussen  (ECB), Thomas Wieser  (Euro working group), Poul Mathias Thomsen  (IMF) and Marco Buti  (European Commission). To avoid premature publication, not a single document was created, no emails were exchanged and representatives of Greece were not informed. The plan was based, among other things, on experiences made in 2003 when the United States introduced the new Iraqi dinar in Iraq. Plan Z would have required separating the Greek economy and the Greek banking system from the Target 2 system, temporarily closing ATMs and temporarily restricting convertibility (e.g. foreign exchange restrictions ).

Parallel currency

Udo Neuhäußer, Ministerial Counselor in the German Federal Ministry for Economic Affairs and Energy , proposed in February 2012 that the Greek state assets be transferred to a special fund and that this should be used as cover for a Greek parallel currency (e.g. called "New Drachma"). This proposal was discussed in 2012 and thereafter.

Greece could control the money supply of this parallel currency itself; likewise the exchange rate to the euro. A parallel currency in Greece gives the Greek government the ability to continue spending without having to rely on loans from the euro area. It could restore the country's international competitiveness. For example, the government could pay government employees part of their wages in parallel currency. The question is whether enough Greeks would be willing to accept the parallel currency as a means of payment as long as they could use the euro at the same time. Charles Blankart and Sven Bretschneider from the Institute for Public Finance, Competition and Institutions at the Humboldt University in Berlin explained why a new Greek currency can be implemented by the state as a medium of exchange; because the new currency can be made compulsory for all transactions with the state and its public companies, which accounts for perhaps 60% of transactions. Even then, staying in the old currency will no longer be worthwhile. The Heidelberg economist Eckhard Behrens argued that the implementation of the parallel currency would be easier due to its increased speed of circulation.

Temporary Grexit

In the negotiations on a third program for Greece, Germany proposed a temporary Grexit. According to this, Greece should leave the euro zone for at least five years. This path would allow sufficient debt restructuring, which would be incompatible with membership in the monetary union. The break would be accompanied by growth-enhancing, humanitarian and technical support from Greece as an EU member. According to a Guardian report , the proposal was supported by Germany itself and eight other countries (Belgium, Finland, Latvia, Lithuania, the Netherlands, Malta, Austria, Slovakia) within the Eurogroup. The proposal was rejected by Greece itself and four other states (France, Luxembourg, Italy, Spain). According to the report, five countries behaved neutrally (Estonia, Ireland, Portugal, Slovenia, Cyprus).

Legal framework

Whether it is possible to terminate membership in the euro zone without leaving the EU at the same time is controversial in the literature: at least a few people believe that a member can, under certain conditions, leave the euro zone without leaving the EU.

Otherwise, however, almost all of the literature is of the opinion that the European treaties do not allow for a forced exclusion from the monetary union or from the European Union. The European Central Bank (ECB) published a discussion paper in December 2009 in which it stated that direct exclusion from the euro zone or the EU would be impossible. It could, however, be forced through indirect means.

European law expert Peter Behrens deduces from company law that a state can be excluded that deliberately engages in obstruction in the long term. A common currency can be compared with the decision of private individuals to process all incoming and outgoing payments via a common account. This can only be successful in a relationship of trust. If a partner continues to behave opportunistically, there must therefore be opportunities for exclusion.

In contrast, the then Greek finance minister Yanis Varoufakis protested against a forced Grexit. In June 2015, he described Greece's membership of the Eurozone as non-negotiable and threatened legal action against a possible exclusion.

Reviews of the Grexit

In 2012, authors of the Ifo Institute for Economic Research (Ifo) compared historical strategies of internal devaluation (including wage cuts) and strategies of external devaluation (devaluation of the currency via the exchange rate). They referred to the poor economic development of Greece and Latvia with their strategy of internal devaluation in comparison to other countries considered in currency crises.

Grexit with currency devaluation would make debt sustainability and hidden losses more transparent. If Greece remains in the monetary union and prices and wages are reduced at the same time, in contrast to currency devaluation, the country's internal debt will not be adjusted: a falling nominal repayment capacity would then be offset by unchanged nominal liabilities. From the debtor's point of view, this path is therefore even more difficult to master than the Grexit. Countries with external devaluation such as Argentina (2002), Thailand (1997) or Italy (1992), however, would have a better development in the phase of devaluation, according to the Ifo study. Compared to an internal devaluation, in these cases the external devaluation was associated with more positive or less negative consequences. However, the authors of the Ifo Institute also referred to the problems of comparison: “the imbalances that Greece is struggling with are much larger”. Weisbrot and Ray also argue that the strategy of internal devaluation causes immense economic and social costs.

Another problem aspect concerns the risk of contagion for other euro countries . According to the report by the IMF and the German Advisory Council from spring 2015, this risk of infection is manageable. To this end, protective walls would have to be set up against speculation. Sufficient funds from the ESM and the ECB are available to buy bonds from other euro crisis countries if necessary.

The German Finance Minister Wolfgang Schäuble was still campaigning for a Grexit by mutual agreement within the Eurozone after the preliminary agreement on July 12, 2015 . A real haircut is necessary, but it is undisputed that - in contrast to the desired rescheduling from ESM and IMF funds - it is “incompatible with membership in the monetary union” for legal reasons. Debt sustainability is also a mandatory requirement for the approval of ESM funds, but this is difficult to achieve without a haircut.

The former Greek finance minister Yanis Varoufakis also saw a link between the haircut and Grexit, although this meant that he was largely isolated within the government. After taking office at the end of January 2015, he opposed a forced exit from the euro, but theoretically played through scenarios in a small group as an alternative to the austerity policy demanded by the lenders . In internal consultations with the Greek government after the referendum , he saw the rejection of the austerity and reform proposals as reinforcement of a proposal that he had already made in response to the bank closure announced a week earlier: issuing own promissory notes, declaring a haircut in relation to Greek government bonds held by the ECB since 2012 and taking control of the Greek central bank. He did not see this as an irreversible development towards Grexit, but said that taking the risk would have strengthened the Greek negotiating position.

The financial effects of a Grexit can hardly be quantified. According to an estimate from January 2015, the costs for Germany would probably amount to 40 to 50 billion euros if debt relief were to be 50%. Carsten Schneider (SPD) forecast costs of "30 billion euros or more" without disclosing the assumptions of his calculation. The news magazine Focus put the maximum possible damage for Germany at around 72 billion euros and assumed that no more than half of this amount would actually be lost. The ECB has categorically ruled out taking part in a haircut: it is not allowed to do so, because debt relief would be prohibited state financing and thus a violation of the European Treaties .

Klaus Regling , Director General of the ESM , described a Grexit in mid-February 2015 as the most expensive solution for Greece and the euro area. He expressed understanding for the efforts of the new Greek government to change the agreed terms and expressed a willingness to compromise.

According to Christoph M. Schmidt , President of the Rhenish-Westphalian Institute for Economic Research and Chairman of the Expert Council for the Assessment of Overall Economic Development, in the event of a Grexit there is a great risk that Greece will stagnate permanently and a humanitarian catastrophe will occur. Current Greek policies are highly dangerous, the best way is a combination of budget consolidation and reforms in Greece. From a German point of view, however, the worst and most expensive way would be to give in to the demands from Athens in order to prevent a Grexit at all costs. According to an internal working paper of the International Monetary Fund, in the event of Grexit, Greece would have to introduce a currency that is not pegged to the euro, but has a free exchange rate to strengthen the competitiveness of the Greek economy. The consequence of a low external value of the new currency is an increase in the prices of imported goods. In order to prevent the risk of severe economic upheavals and hyperinflation within Greece, Greece's new national monetary policy must also take decisive countermeasures. For the former crisis countries Portugal, Ireland and Spain, however, the effects of Grexit are easier to control.

In an interview with the Mittelbayerische Zeitung on June 30, 2015, the former “supreme economy ” Wolfgang Wiegard gave the following answer to the question “How should and can Europe help?”: “Whether Grexit or not: Greece will rely on help for many years to be dependent on the European partners. First of all, it is a question of preventing the population from becoming impoverished by providing support. But it is just as important that Greece becomes competitive again. "

In comparison with the possible Grexit, Wiegard considered the (now decided) exit of Great Britain from the EU (“Brexit”) to be more dangerous.

See also

literature

  • Thomas Mayer : Europe's unfinished currency: what's next for the euro? Wiley, 1st edition 2013, ISBN 978-3-527-50723-8 (English original title: Europe's unfinished currency , Anthem, October 2012, ISBN 978-0-85728-548-5 ) Proposal (p. 191 ff. = Chapter 11: A new basis for the European Monetary Union ): a parallel currency for the creditor countries within the euro group.
  • Kai Carstensen : The GREXIT - why leaving the monetary union could have helped . In: The crisis in Greece: origins, course, consequences . Campus 2015, edited by Wolfgang Schultheiss and Ulf-Dieter Klemm .
  • Sebastian Dullien and Daniela Schwarzer: Dealing with national bankruptcies in the euro area: So far only auxiliary structures. In: The Crisis in Greece: Origins, Course, Consequences , 2015.
  • Wassilis Aswestopoulos: Greece - A European Tragedy: The Background of the Euro Crisis . 1st edition 2011.
  • Johann Legner GREXIT: What the Greece lie costs us . CBX, Munich, 2015 ISBN 978-3-945794-33-3

Web links

Wiktionary: Grexit  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. ^ Daily Telegraph, December 13, 2009.
  2. ↑ "Impending insolvency of a Eurozone: What should the EU do?", Meyer, Dirk / Hasse, Rolf Ifo Institute for Economic Research, Munich, 2009, Ifo Schnelldienst 62 (07), 03-10, http: //www.cesifo- group.de/DocDL/ifosd_2009_7_1.pdf
  3. ↑ z. B. lefigaro.fr February 18, 2015: À quoi ressemblerait la sortie de l'euro de la Grèce
  4. ↑ Greece: Stress test for own mortality. In: sz.de. March 4, 2015, accessed May 30, 2015 .
  5. ↑ Simon Kennedy: Grexit Is So 2012. Citigroup Introduces Grimbo to Crisis Lexicon. In: bloomberg.com. April 23, 2015, accessed April 23, 2015 .
  6. ↑ The Economist, August 25, 2012 .
  7. ↑ See Dutch withdrawal from the European Union in the English language Wikipedia.
  8. ↑ a b c d e f Peter Spiegel: Inside Europe's Plan Z In: Financial Times of May 14, 2014
  9. ↑ Monetization of the Greek state assets in the form of a parallel currency in: ifo Schnelldienst 2/2012 (access via ideas.repec.org)
  10. ↑ The parallel currency: Options, Opportunities, Risks (2012) ( Memento of the original from February 17, 2015 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. . Published by the Federal Association of SMEs ; Anthology of a conference in summer 2012 @1@ 2Template: Webachiv / IABot / www.bvmw.de
  11. ↑ Skeptical z. B. Carsten Hefeker (2012): The Geuro is not a solution
  12. ↑ Benefits and costs of Greece leaving the Euro ifo Schnelldienst 9/2012 - 65th year. P. 15 http://www.cesifo-group.de/DocDL/ifosd_2012_09_2.pdf
  13. ↑ http://www.oekonomenstimme.org/artikel/2013/09/grexit-mit-parallelwaehrung/ Comment
  14. ↑ Tagesschau from July 12, 2015
  15. ↑ The Guardian, July 12, 2015
  16. ^ Jens Dammann: The Right to Leave the Eurozone Texas International Law Journal, Volume 48 Vol. 2 (PDF).
  17. ↑ Jörg Haas: Risk Grexit: Caution when negotiating, policy paper No. 126 of the Jacques Delors Institute Berlin from February 16, 2015, p. 4 ( PDF ( Memento of the original from July 1, 2015 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this note. ); Robert Zbíral: Exit from eurozone under the regime of the Lisbon Treaty: reality or wishful thinking? in: Jiří Jirásek, ea. (Ed.): Ústavněprávní aspekty členství Poslké republiky a české republiky v Evropské unii šest let po přistoupení obou států. Bydgoszcz: KPSW , 2010, pp. 141–150 (p. 7 of the PDF ( memento of the original from September 24, 2015 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. ) @1@ 2Template: Webachiv / IABot / www.delorsinstitut.de @1@ 2Template: Webachiv / IABot / www.pf.upol.cz
  18. ^ Phoebus Athanassiou: Withdrawal and expulsion from the EU and EMU - some reflections. Legal Working Paper Series, No. 10, December 2009 (PDF)

    “… That negotiated withdrawal from the EU would not be legally impossible even prior to the ratification of the Lisbon Treaty , and that unilateral withdrawal would undoubtedly be legally controversial; that, while permissible, a recently enacted exit clause is, prima facie, not in harmony with the rationale of the European unification project and is otherwise problematic, mainly from a legal perspective; that a Member State's exit from EMU , without a parallel withdrawal from the EU, would be legally inconceivable; and that, while perhaps feasible through indirect means, a Member State's expulsion from the EU or EMU, would be legally next to impossible. ... with a reminder that while, institutionally, a Member State's membership of the euro area would not survive the discontinuation of its membership of the EU, the same need not be true of the former Member State's use of the euro. "

    “… That a negotiated withdrawal from the EU would not be legally impossible, even before the ratification of the Lisbon Treaty, and a unilateral withdrawal would undoubtedly be legally controversial; and that, although possible, a newly introduced exit clause would prima facie not be in accordance with the basic principles of the European unification project and would otherwise be problematic, mainly from a legal perspective; and that the direct exclusion of a member state from the EU or European Economic and Monetary Union would be almost impossible , albeit through indirect means . ... it should be remembered that the institutional membership of a member state in the Eurozone would end if it left the EU, while the use of the Euro would still be possible. "

  19. ↑ This is reported by Hans-Bernd Schäfer, Institute for Law and Economics, University of Hamburg, and Bucerius Law School, University of Law, Hamburg, in “What will happen to Greece? Considerations on an insolvency law for international national debt ”p. 22 ( [1] ); see also: Peter Behrens: Is exclusion from the euro zone excluded? EuZW 2010, p. 121 ( PDF ).
  20. ↑ a b Greece threatens top court action to block Grexit Daily Telegraph of June 29, 2015
  21. ^ Benjamin Born, Teresa Buchen, Kai Carstensen, Christian Grimme, Michael Kleemann, Klaus Wohlrabe and Timo Wollmershäuser Ifo Schnelldienst 10/2012: Greece leaving the European Monetary Union: Historical experiences, macroeconomic consequences and organizational implementation ( Memento of the original from 23 September 2015 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , P. 12 @1@ 2Template: Webachiv / IABot / www.cesifo-group.de
  22. ^ Similar to Hans-Werner Sinn in "Captured in the Euro", p. 128ff, ISBN E-Book (PDF) 978-3-86414-626-8
  23. ↑ “Greece leaving the European Monetary Union: Historical experiences, macroeconomic consequences and organizational implementation” p. 30 Benjamin Born, Teresa Buchen, Kai Carstensen, Christian Grimme, Michael Kleemann, Klaus Wohlrabe and Timo Wollmershäuser Ifo Schnelldienst 10/2012 - 65th year
  24. ^ Benjamin Born, Teresa Buchen, Kai Carstensen, Christian Grimme, Michael Kleemann, Klaus Wohlrabe and Timo Wollmershäuser Ifo Schnelldienst 10/2012: Greece leaving the European Monetary Union: Historical experiences, macroeconomic consequences and organizational implementation ( Memento of the original from 23 September 2015 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , P. Ii and 17 @1@ 2Template: Webachiv / IABot / www.cesifo-group.de
  25. ^ Weisbrot, M. and R. Ray (2011): Latvia's Internal Devaluation: A Success Story? , Center for Economic and Policy Research, 12/2011, p. 15
  26. ↑ Spiegel-Online, [2] ; Expert Council, Updated Economic Forecast for 2015 , pp. 8–9
  27. ↑ Wolfgang Schäuble in conversation with Christine Heuer: Schäuble continues to talk about Grexit on time. Deutschlandfunk, July 16, 2015, accessed on July 18, 2015 .
  28. ↑ Yanis Varoufakis: You have lured us into the trap. German Translation of an interview with the New Statesman from July 13, 2015, Neues Deutschland, accessed on July 18, 2015 .
  29. ↑ a b Call for haircut for Athens is getting louder ; Welt.de, accessed on January 28, 2015
  30. ↑ Experts want to enable the euro to be thrown out ; Handelsblatt.com, accessed on January 28, 2015
  31. ↑ Expensive “Grexit”: This is how much it would cost Germany to leave the euro for Greece ; Focus.de, accessed on January 28, 2015
  32. ↑ EU apparently discusses debt relief for Greece ; Spiegel.de, accessed on January 28, 2015
  33. ↑ Regling: Grexit the most expensive solution for Greece and the EU , Phoenix press release, February 13, 2015
  34. ↑ Wirtschaftsweiser: "Greece plays with fire" . Article from April 12, 2015 in the derwesten.de portal , accessed on April 12, 2015
  35. ↑ Internal working paper: IMF predicts Greece at Grexit hyperinflation . Article from April 25, 2015 in the portal spiegel.de , accessed on April 25, 2015
  36. ↑ On the verge of madness , interview of the former "economic wise man " Wolfgang Wiegard with the Mittelbayerische Zeitung , Mittelbayerische Zeitung of June 30, 2015, p. 3
  37. ↑ Review on deutschlandradiokultur.de