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Think of it this way:

If Greece does not get assistance from the EU/IMF, what can its government do?  It can (and I argue should anyway) default on its debt, making its bankers pay for their own bubble-causing decisions.  And it can also leave the EMU, going back to its own currency but in the process possibly threatening the viability of the Euro and to a lesser extent the EU itself, as political institutions.  Given that alternative, it's not unreasonable for Greece to want outside assistance or for others to provide it, but it's also not unreasonable for the providers of that assistance to ask for guarantees of some kind to back of the command over resources that they put at risk by assisting Greece.  So the dynamics of power and collective action kind of limit what is possible here.  The question for non-Greeks is, how much is Greece participation in the Euro worth to us?  For EU citizens it might be more, but for others represented by the IMF it is probably something much less.

by santiago on Tue May 25th, 2010 at 06:06:10 PM EST
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