This week marks the bicentenary of the Battle of Waterloo. I think the Rothschilds made a fortune on "buying on the sound of the cannon and selling when they went silent." In terms of Grexit, should we not be applying this lesson to European Autonomies? 

David Fuller's view

Nicely introduced and this may be the question of the European summer.

The short answer is yes; I agree with you. 

The EU’s empire building and unelected bureaucrats would mostly disagree and regard Grexit as a setback.  The US Government and NATO would worry about Greece accepting Russia’s offer to build a port for Putin’s Navy.  The reality is that Greece is bankrupt and Russia cannot afford its military.  Greece accounts for less than 2% of the EU’s GDP.  Greece has the most left-wing government within the EU and its tactics during negotiations have been unsavoury and politically damaging.  Today, Greece has few allies within the EU.  Grexit would be costly, as is any significant bankruptcy, but unlike three or four years ago, most of Greece’s debt is now held by the ECB, the IMF and Greek banks.

I believe Grexit would soon be followed by short covering in European stock markets, closely following by renewed buying, not least because of Mario Draghi’s ongoing QE.  A deal that kept Greece in the EU would probably have the same positive result on stock markets but it could also be a recipe for further Grexit problems down the road.

Interestingly, Grexit should improve the UK’s negotiating terms with the EU prior to our Referendum.  To paraphrase Lady Bracknell in Oscar Wilde’s play: The Importance of Being Earnest: To lose one country, Mr Juncker, may be regarded as a misfortune.  To lose both looks like carelessness.