Krugman Creates a Stir about Greek Euro Exit

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14 May 2012

This is interesting. As readers of my blog will be aware, I have many differences with Paul Krugman as to economic theory and practice. In particular, I am in opposition to his view that rescuing the badly behaved is wise economic policy.

However, Mr. Krugman's recent comments on the imminent necessity of Greece's leaving the Euro as a shared common currency are of importance.

I'll focus on these two points in Mr. Krugman's brief post:

1. Greek euro exit, very possibly next month.

2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.

Many economists are concerned about the possible implications of a Greek withdrawal from the Euro, now considered probable, based on the dramatic "anti-austerity" results of the recent Greek election.

I for one am paying attention to Mr. Krugman this time.

Watch Spain and Italy... now!
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