Germany

The Real Price Others Will Pay If Greece Quits The Euro Zone

If Athens opts out of the euro zone, the economic union as a whole will probably survive. But it won't be pretty, especially for Germany, which stands to lose upwards of 100 billion euros, according to economists.

Alexis Tsipras (center), head of the Coalition of the Radical Left SYRIZA parliamentary group (PIAZZA del POPOLO)
Alexis Tsipras (center), head of the Coalition of the Radical Left SYRIZA parliamentary group (PIAZZA del POPOLO)
Martin Greive

BERLIN -- Two years ago, the idea of Greece leaving the euro zone was considered out of the question. But more recently – even before last week's elections, which strengthened both left and right-wing parties thus making the formation of a stable government that much more difficult – politicians, banks and economists have begun crunching the numbers to get some notion of how the country would fare if it were no longer a part of the euro zone, and how high the costs of its quitting the euro would be.

"I still think it's more probable that Greece will stay in the euro zone," says Ulrich Kater, head economist at DekaBank, the German Savings Bank Finance Group's central asset manager. "But results of the elections have increased the risk of their leaving."

Kater has reacted to the recent events by asking his team of economists to work through just how expensive it would be for German taxpayers if Greece were indeed to leave the zone. Die Welt has reviewed the resulting report, according to which the German federal budget would suffer losses of at least 86 billion euros.

According to the report, Germany would have to write off its 15.2-billion euro contribution to the first rescue program. Since then, the European bailout fund has paid a further 103.7 billion euros to Greece, 30 billion of which came from Germany. If Athens were to quit the euro, this money too would be lost.

Add to that the losses that would be incurred by the European Central Bank (ECB), which bought 50 billion euros worth of Greek government bonds. For Germany, that would mean another 1.3-billion euro loss. Finally, the Deutsche Bundesbank (the central bank of the Federal Republic of Germany) would have to write off 28 billion euros of payments it made in the framework of TARGET2 (Trans-European Automated Real-time Gross Settlement Express Transfer System).

If Athens does not pay back the International Monetary Fund (IMF), which also contributed to bailout funds for Greece, Germany would also lose its share of that money – 2.9 billion euros. All in all, the costs could top the 100 billion euro level, according to the DekaBank projection.

German regional state banks might also have to write-off their German-government-guaranteed Greek government bonds. Finally, the European Union would most likely have to make currency available to Greece to bridge the period of change to the drachma.

Low risk of contagion

Economist Kater says that while Greece leaving the euro zone would be very costly, and contribute to the ambient chaos of the entire situation, "the view that the euro couldn't survive Greece's leaving the zone is wrong."

Kater believes the danger of contagion is slim, and that Greece is a unique case because in other member countries there continues to be political support for the necessary reforms. "If Greece were to leave, all the negative consequences could even have a strong disciplinary effect on the other members of the zone," he says.

The German Ministry of Finance is also looking at how Greece could be protected from poverty were it to leave the zone. According to Der Spiegel magazine, Athens could count on receiving further billions from the European EFSF bailout fund if it left. The fund would only stop paying monies that went straight to the Greek budget, but those billions serving the government bonds that the ECB bought would continue to flow, thus avoiding ECB losses that would negatively impact member state budgets.

Finance Ministry planning also foresees Greece continuing to be able to count on aid from Brussels as long as the country remains a member of the European Union. Whether or not the IMF would lose billions if Greece leaves the euro zone depends on whether Greece honors present claims.

Meanwhile, Germany's ruling center-right Black Yellow Coalition is becoming more and more receptive to the idea of Athens pulling out of the euro zone. "We would be a pretty strange government if we weren't preparing ourselves for all possible constellations," German Minister of Finance Wolfgang Schäuble told Die Welt.

German Minister of the Economy Philipp Rösler favors not giving the Greeks additional time following the elections to reach austerity goals. "There will not be any changes to, or watering down of, established programs," he said.

Jean-Claude Juncker, president of the Euro Group, has recommended that European heads of government revise the schedule, but DekaBank economist Kater warns of accommodating Greece too much. "In this situation, concessions would only encourage other countries to use radical election results to leverage themselves out of existing crisis plans."

Read the original article in German

Photo - PIAZZA del POPOLO

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January 22-23

  • Navalny saga & Putin’s intentions
  • COVID’s toll on teenage girls
  • A 50-year-old book fee finally gets paid
  • … and much more!

🎲 BUT FIRST, A NEWS QUIZ!

What do you remember from the news this week?

1. Which two words did U.S. President Joe Biden use about possible scenarios in the Russia-Ukraine standoff that upset authorities in Kyiv?

2. What started to mysteriously appear on signs, statues and monuments across Adelaide, Australia?

3. What cult movie did U.S. rocker Meat Loaf, who died Friday at age 74, star in?

4. What news story have we summed up here in emoji form? 🇬🇧 👱 💬 💼 ❌ 🥳 🦠

[Answers at the bottom of this newsletter]

⬇️  STARTER

Toxic geopolitics: More than ever, we need more women world leaders

The world is watching the Russian-Ukrainian border. Russian President Vladimir Putin threatening an invasion finds an ally in Iran’s Ebrahim Raisi, united against their common enemy: the United States. Back in Washington, U.S. President Joe Biden — marking his first year in power with painfully low approval rates (higher only than Donald Trump’s) — sends his Secretary of State, Antony Blinken, to Kyiv to reassure President Volodymyr Zelensky who worries that France’s Emmanuel Macron might undermine Ukraine. And we haven’t even mentioned Xi Jinping!

It’s an endless theater of world leaders beating their respective chests — and they have exactly one thing in common: they’re all men. It’s by now a decades-old question, but worth asking again: What would happen if women, and not men, were running the world? Would there be less conflict, more prosperity? More humanity?

In 2018, the World Economic Forum released a study that showed that “only 4% of signatories to peace agreements between 1992 and 2011 were women, and only 9% of the negotiators.” The report shows that in several conflict zones in the world in recent decades, citing Liberia, Northern Ireland and Colombia, women have been instrumental in achieving peace.

In Colombia, where 20% of peace negotiators for the 2016 peace treaty were women, Ingrid Betancourt, herself a victim of the 50-year conflict, has announced her candidacy for the May presidential elections. Differently from previous bids, where she focused on fighting environmental abuses and corruption, Betancourt now is putting gender issues at the center of her political agenda. Bogota daily El Espectador questions whether the former hostage will be able to ride this important political wave, with feminist movements flexing their muscle around the region demanding more rights.

In Italy, next week’s elections for the head of state are monopolized by infamously misogynous former Prime Minister Silvio Berlusconi, who is hoping to be elected for the seven-year, honorary function. There is no official candidacy, but Berlusconi’s name and that of current Prime Minister Mario Draghi are the two getting the most attention. Italian feminist writer and intellectual Dacia Maraini writes in La Stampa that, yes, the very fact of electing a female president will be progress for the country — and by the way, there are plenty of women qualifed for the job.

There was also a woman politician making the news this week for actually getting elected: Maltese conservative politician Roberta Metsola, became the new European Parliament President after the death of Italy’s David Sassoli. And yet the election of the first female president of the EU’s legislature since Nicole Fontaine in 2001 has been widely criticized by female politicians — primarily for Metsola’s stance against abortion rights. "I think it is a terrible sign for women's rights everywhere in Europe," French left-wing member of the European Parliament Manon Aubry told Deutsche Welle.

The women who have risen to power in history (Margaret Thatcher, anyone?) don’t necessarily make the case that gender is the silver bullet to fix politics. Still, after watching all the toxic masculinity on the world stage this past week, we can rightfully demand fewer men.

Irene Caselli

🎭  5 CULTURE THINGS TO KNOW

• Record-breaking online concert of Mahler’s “Symphony of a Thousand”: More than 100 musicians from around the world will take part today in a performance of Mahler’s epic 8th symphony consisting of 1,200 elements, including a double chorus, children’s choir, a full orchestra and an organ. The event is a culmination of a year of work; all artists recorded their parts in isolation besides the children’s choir. Tickets can be purchased here.

Yearly Japanese festival will set a mountain on fire: Today, the grassy hillside of Mount Wakakusayama in Japan will go up in flames as fireworks go off in the background as part of celebrations for Wakakusa Yamayak. The origin of the festival isn’t totally clear, but might relate to border conflicts between the great temples in the region or to ward off wild boars.

• New insights into antiquities taken by the Nazis: Scholars are looking into how German forces during World War II looted artifacts such as on the Greek island of Crete. Nazi officials pillaged these valuables for their own personal gain, but many were also destroyed, which is why researchers around the world are hoping to gain greater insight into this often overlooked aspect of German occupation.

Exhibition of Beirut’s restored artwork: The Beirut Museum of Art has inaugurated the exhibition “Lift” featuring 17 paintings by Lebanese artists that had been damaged by the port explosion in 2020, and have since been restored as a result of a UNESCO initiative.

The world’s first vegan violin tunes up: Berries, pears and spring water are just some of the natural ingredients relied on for the construction of the instrument by English violin-maker Padraig O'Dubhlaoidh. Traditionally, animal parts like horsehair, hooves, horns and bones are used, especially to glue pieces together. The £8,000 instrument is sure to be music to some animal lover’s ears.

🇷🇺  NAVALNY SAGA & PUTIN’S INTENTIONS


One year ago anti-corruption lawyer and politician Alexei Navalny was detained in Russia, marking the effective end of domestic opposition to Russian president Vladimir Putin. In the time since, more than half of the former coordinators of Navalny's headquarters fled Russia. Even Navalny's name is forbidden: Putin never says his name, calling him "this citizen."

At the same time, Navalny’s imprisonment and the de facto end of the opposition have changed Russia. The fear of persecution, the lack of alternatives and the total censorship and propaganda have caused Putin's ratings consistently downward.

An aging leader with no successors, no enemies and dwindling popular support is finding it increasingly difficult to explain why he must continue to rule forever. In such a situation, there’s nothing quite like an external threat to fuel the raison d’être of the authoritarian regime. In Putin’s eyes, the perfect threat right now is NATO expansion, and the perfect enemy is its neighbor Ukraine and its attempts to join the military alliance. Whether Russia's president is ready to engage in a real war is the great unknown, but its aggressive and uncompromising foreign policy — like his disposing of Alexei Navalny — is the latest legitimization of his increasingly absolutist rule now into its third decade.

Read the full story: What The Alexei Navalny Saga Tells Us About Putin’s Intentions On Ukraine

🇨🇴  FROM HOSTAGE TO POTENTIAL HEAD OF STATE


Íngrid Betancourt spent more than six years as a prisoner of the Revolutionary Armed Forces of Colombia (FARC) terror group in Colombia, an experience that is sure to play a role in her recently announced presidential campaign. Betancourt, who is 60, is running as part of the Verde Oxígeno and is the only woman in the Centro Esperanza Coalition (CCE), a centrist alliance.

Betancourt could be a boost for the coalition and embody its goals of transforming, overcoming polarization and, as its name indicates, giving hope to Colombia. In particular, the centrist candidate who in the past has been largely focused on anti-corruption and environmental protection, has said she will make women’s rights a cornerstone of her campaign.

Read the full story: Ingrid Betancourt, A Hostage Heroine Reinvented As Feminist For President

♀️ 😔  YOUNG WOMEN FACE THE BRUNT OF THE COVID-19 MENTAL HEALTH CRISIS


A growing number of studies around the world show that COVID-19 and lockdown restrictions have prompted a disproportionate increase in mental health illness among teen girls. These include rising suicide rates among adolescent females in the United States, Germany and Spain and a higher prevalence of anxiety and eating disorders in Israel. But why are women being disproportionately impacted?

There’s a range of reasons. In India, for example, young women had increased difficulty accessing education resources when schools went online and shared a disproportionate burden of household tasks as opposed to their male peers. Around the world, social media also played a significant role; without access to in-person socialization and hobbies, young people spent more time online, often comparing themselves to others, impacting feelings of self-worth. The situation is particularly dire given the challenges of accessing mental health support resources during the pandemic.

Read the full story: Why The COVID-19 Mental Health Crisis Is Hitting Teenage Girls The Hardest

💡  BRIGHT IDEA


Norwegian mobility company Podbike has announced that Frikar, its four-wheeled enclosed electric bike, will soon hit bike lanes on home turf. The futuristic-looking vehicle does require the user to pedal, which powers a generator and drive-by-wire system that keep the Frikar running — with a speed limited to 25 km/h.

#️⃣ TRENDING

“Mãe De Bolsonaro” is the top query on Twitter in Brazil, after news that Brazilian President Jair Bolsonaro’s mother Olinda Bonturi Bolsonaro had died at age 94.

😄📚 SMILE OF THE WEEK

Photo of the new President of the European Parliament Roberta Metsola

New President of the European Parliament Roberta Metsola

Philipp Von Ditfurth/ZUMA


London’s legendary bookshop Waterstones Gower Street tweeted a photo of a letter from an anonymous user confessing to having forgotten to pay for their books some 48 years ago. Owing approximately £100 ($136), adjusted for inflation, they had sent through £120 ($163) to make up for their tardiness. Touched by the kind gesture, the bookshop reciprocated by donating the money to the largest children’s reading charity in the United Kingdom.

👉   OTHERWISE ...

Dottoré! is a weekly column on Worldcrunch.com by Mariateresa Fichele, a psychiatrist and writer based in Naples, Italy. Read more about the series here.

Bucket of tears

I’ve been thinking and thinking about a patient of mine since yesterday. His name is Giovanni.

Psychiatrists, you might not know, are quite often asked the same unanswerable question: "Why does one become insane?”

When I was younger, I searched and searched for an answer, losing myself in scientific explanations about synapses, neurons and neurotransmitters.

By the end of my studies, I’d realized that the only thing that was clear was that I’d been clutching at straws to justify my work and give it a semblance of scientific dignity. In the years since, I’ve forced myself, in defiance of the authority of my position, to reply with a laconic but honest: "Sorry, but I don't know."

So when Giovanni asked me that same question, he was not happy at all with my answer. “Dottoré, how’s it possible that you don't understand why I became crazy?”

When he tried to ask me again one day, I tried a different response:

"Giová, do you cry?"

"No. Why?"

"Imagine that the tears that you don't shed, that you force yourself not to shed, because that's what you've been taught to do, all end up inside your heart. The heart is an organ that pumps blood, which brings nourishment and oxygen to the whole body. But over time those diverted tears accumulate to the point that the heart begins to pump them instead of your blood. Slowly your body becomes sick, but the part that suffers the most is your brain. Because tears don't contain oxygen and nourishment, just sadness."

I expected a reaction to this fanciful explanation, but instead Giovanni kept quiet and eventually left.

The next time I saw him, he said: "Dottoré, I've thought about it. I know you told me about the tears to make me feel better, but maybe you’re right. Because sometimes I feel that I have a lake, more than a heart. But it takes a very powerful pump to pump out all that water, and my heart alone cannot do it. And now that you've explained to me how I became crazy, can you also tell me if I'll ever get better?"

"Do you want another story or do you want the truth?”

"This time, I’d rather have the truth!”

"The answer is always the same then. I'm sorry, Giová, but I don't know this either. But I can tell you one thing for sure. I'll help you slowly, slowly with just a bucket. Because the truth is, not even I have that pump."

⏩  LOOKING AHEAD

• Italy's parliament will convene Monday to begin the process of voting for a new president to succeed Sergio Mattarella for a seven-year term.

• Qualification games for the 2022 FIFA World Cup will be held from Jan. 27 to Feb. 2 for South, North and Central America as well as Asia. Argentina’s national team will not be able to rely on superstar Lionel Messi, still recovering from COVID-19.

• Next Thursday will mark 100 years since Nellie Bly died. The American journalist is known for her record-breaking 72-day trip around the world in 1889, inspired by Jules Vernes’ book Around the World in Eighty Days


Keep reading... Show less
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