Well, having been so lavishing in my praise of Ralph Atkins in recent posts, perhaps it is time for the administration of a gentle “rapapolvo” (otherwise, you know Ralph, people might start to talk), and just to hand he offers me the ideal opportunity to “discrepar“. A little instability is, it appears, a dangerous thing, but not, it seems entirely and unequivocally dangerous:
True, Greeceâ€™s plight has weakened the euro, which has ended this week back down at levels last seen in early November. A weaker euro, however, will help boost eurozone growth – and thus come as a relief to eurozone policymakers. A little instability is not necessarily all bad.
Now, with all the other pressing topics I currently have on my plate I would normally have quietly passed this one by, had it not been for the fact that earlier in the week, over at the Economist, they came up with a similar “saving grace” for a partial Greek default.
How badly the euroâ€™s standing would be hurt by a default would depend on the state of public finances elsewhere: if America were struggling too, the dollar might not seem an attractive bolthole. If the current struggles with a strong euro are any guide, euro members might even half welcome a tarnished currency.
I can think of a thousand and one different ways in which the euro might lose some of its current strong value, I can even imagine a goodly number of those which might be decidedly positive, but what I can’t for the life of me accept is that one of them would be the sort of economic, financial and political chaos which we may now be about to see in Greece.