A MONTH ago Greek membership of the euro was in peril, as Wolfgang Schäuble, Germany’s powerful finance minister, argued that Greece should leave the monetary union for at least five years in what he euphemistically called a “time out”. Any such exit, which would almost certainly have turned out to be permanent, would have undermined a founding principle of the monetary union—that those joining the euro do so irrevocably. Even after euro-zone leaders meeting at a crucial summit managed to agree upon a framework for a bail-out agreement on July 13th the chances of it actually being concluded and avoiding a “Grexit” seemed slim. Mr Schäuble made clear in the following week that he still thought Greece should be temporarily expelled from the euro while Alexis Tsipras, the Greek prime minister, said he did not believe in the agreement he had just made at the summit.
Yet, on August 14th, the Eurogroup of euro-zone finance ministers gave the green light to the bail-out, the third since May 2010, in which Greece will get up to €86 billion ($95 billion) in rescue funding over the next three years. The next hurdle is getting the consent of...Continue reading
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