There’s a lot going on in Greece.
But amid the will-they won’t-they negotiations between Greece and its Eurogroup creditors, the bigger question is whether Greece will remain in the eurozone or not.
In a post on Tuesday, economist and blogger Tyler Cowen outlined five reasons why Greece could up and leave the economic bloc this year:
- Most commentary isn’t accounting for the fiscal collapse of the Greek economy. “I am not sure there is any fix,” Cowen writes, and the expression ‘failed state’ comes to mind.”
- Syriza might not have a coherent bargaining strategy at all. Cowen writes, “I take this point from a broader reading of history, where I see that quite often leaders in critical positions simply do not know what they are doing.”
- Lots of people are overstating the permanence of the current state of global affairs.
- Not enough people see the Greek discussions as a “nested game,” in which Cowen writes, “concessions to Greece would have to imply larger concessions elsewhere and embolden Podemos in Spain.”
- Finally, Cowen writes, “it is hard to see Greece being in truly safe territory for the next few years to come, even if a handy bargain is dispatched over the next day or two.”
Cowen concludes his post writing, “I gladly admit all of those reasons are speculative rather than firm or based in concrete information. But that is what I think and why. I don’t consider this kind of prediction to be very scientific, but still we proceed by engaging in discourse and, next time around, seeing what we got wrong the time before.”
Earlier on Tuesday, RanSquawk noted that on betting site Paddy Power, you could get 2/1 odds that Greece leaves the eurozone this year, implying a 33.3% chance of it happening.
And as for the latest news out of Greece? Bloomberg reported on Tuesday that Greece appears ready to seek a six-month extension of its loan agreement.