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Why Greece will stay

Max Hofmann/ db
April 29, 2015

The European Union has never been as close as it is today to seeing Greece leave the eurozone club of 19 nations using the common currency. DW's Max Hofmann explains five compelling reasons why there won't be a 'Grexit.'

Symbolbild Hilfe für Griechenland
Image: picture alliance/chromorange/Ohde

1. A 'Grexident' isn't as inevitable as you might think

Over the past months, we've heard over and over again that once the Greeks miss an IMF payment, they're officially broke, the banks will close and an inevitable automatism will run its course. That's not how it works. IMF chief Lagarde won't instantly announce Greek bankruptcy. It would have to be formally established, which would take a few days. Even then, Lagarde still has some political wiggle room if the Greeks promise to change their ways. Greece takes its leave from the currency union against the wishes of other members and totally by mistake? In reality, the institutions aren't that powerless.

2. An exit won't make the deal cheaper

The Greeks exit the currency union - and then what? Remember the frequently invoked risk of infection. Speculators could try to drive Portugal or Italy into bankruptcy. These days the EU is better prepared for such scenarios than it was just a few years ago, but no one in Brussels would rule it out completely. In any case, the European Union would have to continue to support Greece somehow even after an exit because it would lead to a complete economic collapse. No matter whether Greece is still part of the EU or not, the EU would have to help. And that is unlikely to be much cheaper than keeping the Greeks in the currency union.

Max Hofmann
Max Hofmann heads DW's Brussels studioImage: DW/B. Riegert

3. Geopolitical nonsense

Situated in the unstable Balkans, traditionally a friend of Russia, wide-open for refugees crossing the Mediterranean - Greece is all of the above. Do the EU member states want to drive such a country into complete isolation, with incalculable geopolitical consequences? These days, the answer can be found in the words chosen by many a European politician who justifies aid for Greece not by pointing out the economy, but the geopolitical situation.

4. Tsipras finally got it

Some observers in Brussels say the ill-tempered finance ministers' meeting in Riga was the turning point. Greek Prime Minister Tsipras understood that he doesn't have any trump cards left, and accordingly swapped out his chief negotiators. It would seem that the troika is once again dealing with people who understand their job and aren't simply idealistic daydreamers.

5. A union is a union is a union

If Greece were actually to exit in the end, the currency union would no longer be a real union. It would be more like an exchange rate network, at least that's what it would look like. The incentive to create close economic and political bonds would be considerably weaker. It would be a blow to the European idea of the past decades. The EU heavyweights will do all they can to prevent that scenario from happening.