《20160521 FT A permanent precedent (Martin Wolf)》.pdf

5/21/12 Ape r rna n e n t pre c e den t - F TODD Ff9=r;C[XXJ ~J~L~ /~~/~T • ¥3(1J\x A permanent precedent By Martin Wolf 2012-05-21 () The irritation of the eurozone with Greece is at extreme levels. After all, 80 per cent of Greeks say they are in favour of staying in the euro, but then they fail to elect politicians prepared to implement the agreed programme. This drives creditors crazy. Increasingly, the latter are inclined to accept Greek exit, even welcome it. But they should be careful what they wish for. A departure would create severe dangers. The danger of contagion is obvious. The long-run danger is more subtle. But the eurozone either is an irrevocable currency union or it is not. Ifcountries in difficulty leave, it is not. It is then an exceptionally rigid fixed-currency system. That would have two dire results: people would not trust in its survival and the economic benefits of the single currency would largely disappear. These perils are not of concern to the eurozone alone. Taken as a whole, this is the worlds second-largest economy, with the largest banking system. The risk that a www. ftc h i n e s e . co ml s tor y 1 00 1 0446321 en 1 7 P r i n t = Y 1 1 5/21/12 Ape r rna n e n t pre c e den t - F TODD bigger eurozone upheaval would cause a global crisis is real. As frightening is the likelihood that eurozone crises would become permanent features of the world economy. What, then, are the dangers? Start with Greece. It is in a doom loop. Unemployment soared from 7 per cent of the labour force in May 2008 to 22 per cent in January 2012, while the unemployment rate of people aged under 25 jumped from 21 per cent to 51 per cent. Worse, despite fiscal austerity and debt restructuring, the