Greece will have to leave EMU whoever is elected
The exact circumstances and timing of Greece’s ejection from monetary union no longer have any systemic importance for global finance. The damage has already been done. The precedent of EMU break-up is by now priced into the credit markets. Formalising it changes little.
By Ambrose Evans-Pritchard
17 Jun 2012
Central banks across the world are standing ready to shower markets with emergency liquidity. A dust-up in Athens is the excuse they need to launch a fresh blitz of stimulus as the global economy flirts with recession once again.
Fed chair Ben Bernanke requires a crisis somewhere to outflank his own hawks and slip another round of quantitative easing (QE) past the Tea Party Congress before the “fiscal cliff” – 4.5pc of GDP in tightening – hits the US economy with a sledgehammer this winter.
Mario Draghi at the European Central Bank needs one even more badly to check his own liquidationist reactionaries before they destroy Europe’s post-War order altogether.
Any action may already be too late to stop a synchronised slump on both sides of the Atlantic, with China, India, Brazil, and Russia in trouble too.
The US has slowed to stall speed. Retail sales have fallen for the last two months. Job growth has dropped from 259,000 in February to 69,000 in May, too low to stop unemployment rising again.