Spiegel Magazine Does Not Rule Out Greece’s Exit from Eurozone

The German magazine ‘Der Spiegel’ strikes again by publishing a new Greece’s Euro-Zone exit scenario, according to which the German government is preparing for Greece’s possible exit from the euro zone in the case that the country’s new government decides not to continue with the previously agreed austerity programs.

Under this scenario, peripheral Eurozone members like Spain and Italy would be better able to tackle their problems without the additional burden of the Greek crisis.

In addition, the government experts also looked at a so-called worst-worst-case scenario. In this model, Greece’s new currency would dramatically devalue against the euro. That would have the positive effect of making the country’s exports cheaper, but the negative effects would outweigh the benefits.

“The country’s credit rating would be immediately downgraded again, and Greek companies would struggle to get access to money because the country’s banks would also be cut off from international capital markets”, the magazine says.

The country could take decades to free itself from this vicious circle, and other nations might also be drawn into the vortex. Nevertheless, according to the magazine, the German government experts do not consider this scenario to be the most likely one.