{"id":311349,"date":"2010-02-12T04:57:00","date_gmt":"2010-02-12T09:57:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/morgan-stanley-greece-has-to-do-whatever-europe-says-because-leaving-the-euro-would-destroy-the-country-2010-2"},"modified":"2010-02-12T04:57:00","modified_gmt":"2010-02-12T09:57:00","slug":"morgan-stanley-if-greece-leaves-the-euro-its-over","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/311349","title":{"rendered":"Morgan Stanley:  If Greece Leaves The Euro, It&#8217;s Over"},"content":{"rendered":"<p><div style=\"float: left; padding: 15px 15px 15px 0;\">\n<script type=\"text\/javascript\">\/\/ <![CDATA[\ntweetmeme_source = 'moneygame'; tweetmeme_service = 'bit.ly';\n\/\/ ]]><\/script><br \/>\n<script src=\"http:\/\/tweetmeme.com\/i\/scripts\/button.js\" type=\"text\/javascript\"><\/script>\n<\/div>\n<p>Being part of the euro system has been both a blessing and a curse for Greece. On the one hand they&#8217;ve had the advantage of a major international currency and the implied backing of other Eurozone nations.<\/p>\n<p>On the other hand, some of Greece&#8217;s debt problems have been exacerbated by the nations inability to independently devalue its currency or change interest rates in response to crushing debt levels.<\/p>\n<p>Yet Morgan Stanley&#8217;s Emma Lawson points out that whether Greece likes it or not, at this stage they must stick with the euro. If they left today, the country&#8217;s already disastrous debt problem would become an outright catastrophe due to euro-denominated liabilities:<\/p>\n<p style=\"padding-left: 30px;\"><span style=\"text-decoration: underline;\">Morgan Stanley:<\/span> However, Greece can neither raise interest rates nor directly weaken its currency, thus increasing the internal pressures. This highlights the pressures on the EUR, should the situation in Greece worsen.<strong> It also highlights why Greece would be extremely unlikely to want to exit the common currency &ndash; as the likelihood of an extremely sharp depreciation of Greece&rsquo;s new currency would be high. With liabilities in euros and free capital flows, it would be an extremely difficult economic position for Greece to be left in.<\/strong><\/p>\n<p style=\"padding-left: 30px;\">&#8230;<\/p>\n<p style=\"padding-left: 30px;\">Exhibit 3 shows the rapid increase in the ratio of short-term external debt to reserves, while Exhibit 4 shows Greece&rsquo;s relatively lower level of reserve assets to GDP.<strong> In the event of a sudden withdrawal of capital, Greece would have a difficult time preventing a currency crisis, if it were not in the common currency.<\/strong><\/p>\n<p style=\"padding-left: 30px;\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4b751edd000000000077acab-400-\/chart.gif\" border=\"0\" alt=\"chart\" width=\"400\" \/><\/p>\n<p style=\"padding-left: 30px;\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4b7524fd0000000000e4e978\/chart.png\" border=\"0\" alt=\"Chart\" \/><\/p>\n<p>Which means that, ultimately, Greece has no choice but to do exactly as they are told by the Eurozone.<\/p>\n<p><em>(Via: Morgan Stanley, Olympian task, Emma Lawson, 11 Feb 2010)<\/em><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/morgan-stanley-greece-has-to-do-whatever-europe-says-because-leaving-the-euro-would-destroy-the-country-2010-2#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><b>See Also:<\/b><\/p>\n<ul>\n<li><a href=\"http:\/\/www.businessinsider.com\/citigroups-mortgage-department-will-let-foreclosed-home-owners-hang-out-for-six-months-after-defaulting-2010-2\">Citi: If You Agree Not To Trash Your Home After A Foreclosure, We&#8217;ll Let You Hang Out There For Six Months<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/speculators-may-turn-their-eyes-to-england-now-that-euro-is-settled-2010-2\">Without The Protection Of The Euro, Bearish Speculators Turn Their Focus To The UK<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/wow-greek-bailout-really-is-euro-tarp-2010-2\">Wow! The Greek Bailout Really Is Euro-TARP!<\/a><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/NRcVjLPHhKY\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Being part of the euro system has been both a blessing and a curse for Greece. On the one hand they&#8217;ve had the advantage of a major international currency and the implied backing of other Eurozone nations. On the other hand, some of Greece&#8217;s debt problems have been exacerbated by the nations inability to independently [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-311349","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/311349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=311349"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/311349\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=311349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=311349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=311349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}