Ray Barrell's picture
Brunel University London
professor of economics

Voting history

Greece’s elections and the future of the Eurozone


Question 2: Do you agree that refusal of the core EU countries to a renegotiation of the Greek bailout agreements would carry serious risks for the economic well-being of the Eurozone?


Confidence level:
Not confident
It should be possible to isolate the Greek problem, and the ECB should be able to take precautions to cover exit risk for other government bond holders. Greek exit from the Euro Area may strengthen the Area as it would become clear that the fiscal rules are binding. Conceding to the Greeks over debt forgiveness may encourage other countries to play the same strategy, and this would weaken the Euro Area.However, it would be better for the Greeks if they stayed in, and some concessions (short of debt restructuring) should be considered. It may be possible to slow the austerity programme noticeably in response to clear and binding commitments to move the Greek economy toward a more competitive market based model. There are also asset sale options and wealth tax possibilities that can be explored to reduce the debt burden.