Europe's Economic War

With Greece all set to exit the Euro its worth considering the fallout which is about to ensue. Many feel like Greece is being held at ransom, with an exit of the Euro signalling a break in economic ties and ultimately an exit from the European Union. But with over €140bn owed to Europe the big question is how will the euro powers react to a left wing government who may default on a debt that is set to sting Greece for generations.

Greece may feel like this is the best time to walk, advocates pointing to Iceland as a country that recovered from a debt crisis by building new foundations, but with adverse poverty setting in and a poor social welfare system to support the people who are struggling the most it’s not beyond reason to consider that Greece may face a humanitarian crisis.

Further still if the debt remains unpaid and Greece exit Europe, trading may proof extremely difficult for the new government, with little money coming from outside the country to support a new economy and with little hope of raising money for the exchequer on the bond market, Greece is likely to struggle for some time.

To compound matters further the euro powers may even impose tougher trading sanctions as a result of the default, which would impede growth even further and leave Greece looking like a European Cuba.