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It may seem unthinkable, but somehow I guess Germany would think twice before insisting on the path of doom should a country like France or Italy make a credible exit threat.

I think this is very much a mistake. Threats are always unpopular. The German government is also under substantial political pressure. The only way I can think of that Germany would agree to changing the rules for the Eurozone is if our own economy goes badly.

Otherwise I think threats will be counterproductive.

But there is an even more important problem with hinting that you will leave the Euro: Your Banks will be destabilized. In principle the only non-destructive way to leave the Euro, would to do it suddenly without telling anybody beforehand. This again, would be politically very unpopular basically everywhere.

by rz on Fri Nov 28th, 2014 at 10:24:05 AM EST
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