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Alarmingly the UK Conservative analysis of the unmsustainability of the Euro seems to be coming true.

Presumably the answer for |Greece is to repudiate the debt in total, withdraw from the Euro and accept that the New Drachma is going to start its existence at a low value.

The richer Greeks would then see the value of assets they have kept at home severely depreciate. Foreign creditors would lose their investments. However some new growth could at least try to emerge from the scorched earth of the old economic order.

The above seems to me to be a best case solution for Greece, in the absence of agreement for massive gifts in transfer payments from the richer parts of Europe. Perhaps an intra-European equivalent of the Marshall plan after the Second World War might work, but I doubt either the vision or the altruism (enlightened self interest) to tey such an approach is lacking. Certainly the British public would be strongly opposed.

by Gary J on Mon Feb 13th, 2012 at 10:26:25 AM EST

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