By TraderVox.com
Tradervox.com (Dublin) – This is a possibility that Greece will leave the euro after the US election. While this conclusion is not necessarily related to reports indicating that Europe want to help Obama win the election. There are reasons that would lead to Greece exit from the monetary union in the coming weeks. Some of these reasons are directly related to the election while others are just coincident.
First, there is a possibility of coordination between the EU and US in handling of the Greece affairs. The US has invested in Greece through the IMF and any move would affect the world’s largest economy. While the policy on Greece would not be different under either administration, the EU leaders would rather work with what they know.
Secondly, the numerous delays in dealing with the Greece problem may be deliberate. The eurogroup leaders meeting on Oct. 8 and the EU summit on October 18-19 and other meeting have failed to come up with a solution. There are also reports indicating that the Nov. 12 meeting will not give any solution. Further, Greek Prime Minister has indicated that the austerity measures to be discussed in parliament tomorrow are the last one he will accept. In addition, there is a high chance that the parliament will not pass it.
Thirdly, the end of autumn has come. Jean-Claude Junker, the head of eurogroup, had indicated in august that he sees Greece staying in the euro zone at least up to the end of autumn. While he went ahead to add “and after that too”, the statement will be put to test this month.
Fourthly, Greece is running out of money. There are speculations that Greece will run out of money by November 16, other reports are contrasting and indicating that it will be the end of November. Despite the deadline uncertainty, it is clear that Greece is running out of money. The troika has indicated that Greece has to pass the harsh labor reforms which are opposed by most in the country. The government is losing support and this complicates matters. In addition, a court in Greece said that the reforms may be unconstitutional. These hurdles may be hard for Greece to overcome.
Lastly, it is clear that Germany is reaching its limits.
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