Liam Halligan Calls for Grexit, Pronounces Euro Doomed

February 23, 2015

Liam Halligan, writing in the Sunday Telegraph, called for Greece to negotiate an orderly exit from the Euro. Beyond that sensible approach, Halligan went much further, equating the Troika deal with Greece with the 1919 Versailles Treaty, which imposed killer reparations payments on Germany, and led to world war. While Halligan noted that he doubted there would be a war in Europe as the direct result of the Troika looting of Greece, he concluded that the entire Euro system is doomed—and the major European powers are too stubborn and too blind to see the inevitable.

After quoting from John Maynard Keynes' famous denunciation of Versailles, Halligan reviewed the stand-off at Friday's meeting of Eurozone finance ministers, which put off a decision on Greece for four months:

"Without it, creditor payments would have seen Greece running out of cash as early as next month. That would have sparked default and bank-run across the systematically important, state-owned Greek banks, with the country crashing out of the eurozone. Contagion would then have spread, upending financial markets worldwide. That is why Mr Varoufakis has been so regularly on the phone to his US counterpart Jack Lew, providing updates."

Halligan forecasted that ultimately, Germany would have to make concessions to the Greeks, but that this would, itself, trigger political instability throughout Europe, translating into political victories for anti-EMU parties in upcoming elections this year in Italy, Spain, and Portugal, and boost similar parties throughout Europe, including in Germany, creating a Europe-wide "anti-Brussels mandate."

Halligan concluded:

"The best outcome of these negotiations, long term, would be for the two sides to agree to differ, acknowledging the single currency is a dangerous nonsense and make all efforts to secure for Greece, and whichever other countries want it, the closest we can get to an 'orderly exit...' The euro will eventually break up. But, before it does, we'll see a lot more democratic transgressions as big countries, aided by the Brussels machine, impose their will on smaller neighbours... I'm not predicting war in Western Europe. But I am saying the eurozone will generate ever-rising tensions and spiralling financial instability until it finally implodes or is deliberately dismantled. Some of us predicted that years ago—and now it is coming to pass."