From this analysis, it would seem then that the best bet for Europe, at least from an economic and a financial perspective, would be to take the loss from a Greek default and expel the country from the common currency. That, however, seems unlikely, since neither Brussels, Berlin or Paris wants their grand experiment to suffer even the slightest taint of failure. Chances are, then, that future realities will include elements of each of these potential developments. The troika may, for instance, give Athens a concession on austerity, enough perhaps to relive the risk of a Greek governmental collapse, but not so much that the rest of Europe’s periphery would seek the same treatment. Of course, such a compromise could also create the worst of both worlds: demands from the rest of the periphery and a dissatisfied Greek electorate. Either way, Europe’s fiscal-financial crisis seems set to drag on for some time to come.      

Milton Ezrati is senior economist & market strategist for Lord, Abbett & Co. and an affiliate of the Center for the Study of Human Capital at the State University of New York at Buffalo. He writes frequently on economics, finance, and politics. His most recent book, Thirty Tomorrows, on aging demographics, the challenge it presents, and how the world can cope, was recently released by Thomas Dunne Books of Saint Martin’s Press.

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