Catch 22 in the EU

Paul Belien writing at Hudson New York: “With the euro in crisis, the British are currently counting their blessings while the Germans are trying to cut their losses. The near bankruptcy of Greece is dragging the euro down, but bailing out the Greeks is probably illegal under the EU Treaties, while ejecting Greece from the eurozone is illegal as well . . . Legally, however, it is impossible to eject a country from the eurozone without ejecting it from the EU altogether – which is legally impossible as well. This creates a catch 22 situation, which the Germans can only solve with a very radical solution: leaving the eurozone themselves. If Berlin were to do this, it would be able to create a new eurozone without the PIIGS countries – a euromarkzone of sorts, with France, the Benelux countries, Finland, Austria and Slovenia. Though no-one is admitting it in public, various economists do not rule out such a scenario.”