The most dangerous comment regarding the future of Greece’s economy was uttered by legendary American investor Warren Buffett 10 days ago. “If it turns out the Greeks leave, that may not be a bad thing for the euro,” he said. “If everybody learns that the rules mean something and if they come to general agreement about fiscal policy among members or something of the sort, they mean business, that could be a good thing,” he added, speaking to television network CNBC. Despite the “ifs,” the message is clear and important on several levels.

For the first time, a serious American voice has raised the possibility of our country’s expulsion benefiting the euro. Until now, only various euroskeptics had urged an end to Greece’s membership, whereas US officials and analysts voiced fear of anything that could shake the global economy. The ace in the Greeks’ negotiating tactics was the Americans’ fear of the unexpected and the Europeans’ concern that a Greek exit could suggest that the common currency (and thereby the whole European project) was vulnerable and reversible. Another important issue was the danger of US fund managers seeing Greece’s exit as the start of the euro’s unraveling, leading them to pull out of the European south or even the eurozone as a whole.

Buffett’s oracular declaration could change everything. While the Greek government still claims that other European leaders and the creditor institutions are bluffing and will accept Athens’s arguments by April 24 (as State Minister Alekos Flabouraris told Mega TV Thursday), our partners have begun to look at the possibility of the euro actually being strengthened by Greece’s exit. From fearing the unpredictable consequences of our exit, we may soon see our partners encouraging us to slip as we dance on the window ledge.

Prime Minister Alexis Tsipras declared in Moscow on Wednesday that the Greeks are “co-owners” of the ship called Europe, and equal to the other passengers, implying that there is no danger of Greece finding itself overboard. In our partners’ eyes, though, there are no “passengers” – everyone has to grab an oar and pull their weight. Also on Wednesday, at the meeting of finance ministry officials in Brussels, when the Greeks declared that their country was running out of money, their partners replied that Greece had six working days to persuade them that Athens is serious about reform. Yesterday, Jamie Dimon, CEO of JPMorgan Chase, America’s largest bank by assets, was quoted as writing to shareholders that the bank needs to prepare for the possibility of Greece leaving the euro. After a period of “initial turmoil” this might even benefit the euro, he noted, because it would “prompt greater structural reform efforts by countries that remain.”

Buffett’s message has been received. Now it is up to Greece to show why it has to stay in the eurozone.

Nikos Konstandaras ()

 

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