Over of what Grexit might mean – a

Over the past few years two major arguments have been reigning among EU member states and other social and political analysts on the continuous financial set-backs with Greece.  Two tentative questions stand out of the debate, which are; 1. With Greece making up just 2% of the eurozone economy, would a “Grexit” even matter?2. Would Greece be better-off without the EU?This has led to a shadow Grexit  campaign.  In July 2015 a study catalogued the following five reasons to this argument:1. ‘Grexit’ A Sure Death-trap For Greecea. There is no guarantees that a Greek economy freed of the Eurozone chains would flourish.b. The Bank of Greece’s very bleak posture of what Grexit might mean – a deep recession, with soaring unemployment and slumping incomes.4c. Ordinary Greeks would find their savings devalued. d. Greece would find itself an outcast on international credit markets, making a swift recovery even more unlikely.e. It would have to introduce a new currency, bringing further instability.f. Greece has a history of coups and there are fears leaving the euro could prove politically debilitating which by extension would affect the rest of the MS.2. Whatever the outcome, it will have a knock-on effect in other countriesEuropean politics is so intertwined it is hard to imagine a scenario that cannot be spun to the advantage of at least one of its actors.The progress of Greek Prime Minister, Alexis Tsipras, is being closely watched by other anti-austerity parties like Spain’s Podemos.We all know the influence of Germany in the Eurozone so if Germany agrees to a write-down of Greek debt, German Chancellor Angela Merkel could face a backlash from voters unhappy about Greece being let off the hook and the outcome maybe disturbing to the entire zone.Anti-EU parties such as France’s National Front, or Britain’s Ukip, strengthens their argument that European integration is ultimately doomed as a results of some harsh economic crisis among some MS.  A Grexit would therefore be dent on the collective Eurozone agenda.Another factor is that Greece, along with Italy, has borne the brunt of the surge in numbers of migrants from the Middle East and North Africa.  A Greece out of the euro would be less able – and less inclined – to co-operate on this issue. Greek Defence Minister Panos Kammenos has invoked this possibility by threatening to “flood” Europe with migrants if Greece was allowed to go bust. Greece is also a NATO member, and the organisation has warned of “repercussions” if Greece leaves the euro.5Wolfgang Ischinger, a former German ambassador to the US once told Bloomberg that”If Greece leaves, I’ll bet you that in Moscow, this will be seen as confirmation of the Russian theory that the European Union is in decline and about to fall apart.” 3. The Fear of Rusia InfluenceThere are fears for the growth of Russian influence on Europe therefore a Grexit could force Greece to seek Russian aid – but it is not clear what Moscow’s price may be.4. If Greece goes, others could followA key worry is that if Greece were to leave, it would start an irreversible domino effect.Unlike the last Greek crisis, there are reasons to believe this would not happen – the EU has taken steps to isolate financial difficulties of one member state from the rest.If Greece were to leave, it would be at a time when the European economy is recovering, softening the blow.A US Treasury Secretary Jack Lew  once said ” it would be a mistake to think there would be no contagion”. The contagion probability here is that former bailout recipient countries like Portugal and Ireland, could be dragged back into crisis.A Greek exit would change how the common currency project is seen.The EU commission once described eurozone membership as “irrevocable,” but Greece leaving would show that is no longer the case.5. The global economy won’t like itAlthough Greece makes up a tiny part of the world economy but its role in one of the world’s major currencies means its exit is unlikely to be shrug ged off .In recent past stock markets have slid and risen in line with speculation about whether a deal can be reached and are likely to be  intense by a Grexit.6Greece’s creditors such as the European Central Bank and other European countries would also face immediate losses. Even if Greece strikes a deal, its problems will not be solved overnight. Nor will all the criticisms of the single currency be answered. Further uncertainly seems unavoidable. “The marriage may endure,” says the Economist magazine – “but even more unhappily than before”.