How 'Grexit' will benefit our economy
Regardless of the result of today's general election it is now clear that Greece is on its way out of the euro, possibly within a few weeks. While a Greek departure/expulsion from the eurozone will cause huge turmoil, "Grexit" will almost certainly be to this country's advantage.
Even if the conservative pro-bailout New Democracy Party manages to squeeze out a victory, it is clear that the Greek consensus supporting troika-dictated austerity has evaporated. A pro-bailout government might limp along for a few weeks or months but the final result, a return of the drachma, is no longer in any doubt.
So what does all of this mean for Ireland? In the very short term, further eurozone turmoil will make matters even worse for this country. However, beyond the short term, the outlook is considerably less bleak.
Following a Greek exit from the euro, one of two things is likely to happen. The first is that it will frighten the life out of the eurozone's core, basically Germany. It then agrees to the measures, including direct European recapitalisation of banks, quantitive easing and allowing the ECB to act as a lender of last resort.
Letting the ECB act like a real central bank and European recapitalisation of banks would be very good news for Ireland, whose national debt has been artificially swollen by the €63bn we have pumped into the Irish-owned banks.
Far more likely is that, once the taboo on countries leaving the euro has been broken, other countries will also either be forced out or asked to leave. Contrary to what one might think, our departure, whether forced or voluntary, from the single currency could be very good news indeed for Ireland.
With our main export sectors, both indigenous and multinational, already regaining their competitiveness, an Irish departure from the euro and the cheaper domestic currency this would entail could be just the tonic required to restore growth to the domestic economy.
A cheaper Irish currency would also facilitate an across-the-board write-down of private sector debt, including mortgages. This would ease the pressure on both the banks and borrowers.
Sunday Indo Business