Despite the Greek parliament’s support last night for an unpopular new property tax, Europe’s divisions over the terms of any new bailout give credence to talk of a looming euro exit. But such an exit would be terrible news for Greece, and equally terrible for the eurozone. The bottom line is this: Greece isn’t going anywhere.
Greece has zero interest in leaving because its economy would lose more than it gains with a euro exit, and a devaluation. The eurozone’s core countries also have ample incentive to keep Greece in the club. Why would Germany agree? German exports — the lifeblood of the eurozone — would decline as a result of the currency appreciation precipitated by a Greek exit. On a broader level, if Greece left the eurozone, it would set a very dangerous political and economic precedent for other debt-ridden countries — Italy in particular.