Since the crisis broke out, governments have equipped the eurozone with permanent bailout funds and a mechanism to prevent failed banks, however large, from torpedoing an entire country. The European Central Bank’s pledge to counter any broad selloff in bonds has also reduced the ability of a small country such as Greece to break the larger union apart.
conomists agree that the currency union is more resilient today than in 2010. Less than a fifth of Greece’s debt is now in the hands of the private sector, and the rest is held by governments and other official lenders. That means the direct risk of contagion attacking the rest of the eurozone financial system is reduced.
The eurozone is much better equipped to cope with a selloff than it was five years ago, especially thanks to the ECB,” said Dirk Schumacher, senior European economist at Goldman Sachs in Frankfurt. “But a Greek exit would create a precedent and it’s very hard to say what the impact on financing costs for other peripherals would be.”
Fascinating graph of the growth rate of the working age population in various countries -- negative 1% in Japan!