The Bluffing Game (Grexit Edition)

Which side is bluffing in the current Game of Chicken* between Greece and the EU? (*Or is it a “War of Attrition”?) Maybe we should be asking a different question: Who has more to lose if Greece were to leave the EU? From yesterday’s Telegraph (UK), for example, we see there are “deadlines”:

The European Union faces “the most critical” moment in its 64-year history, after leaders warned they had five days to prevent Greece from careering out of the euro and into a full blown humanitarian crisis.

And then there are deadlines:

Without any fresh injection of emergency funds, Greece is set to default on a €4.2bn payment to the European Central Bank in 12 days time, putting it on the inexorable path of issuing an alternative currency and a chaotic eurozone exit.

Enough already … Why hasn’t the European Union just kicked Greece out of the EU already? Doesn’t Greece need the EU more than the EU needs Greece? Or is it the other way around? After all, isn’t it possible that a Greek exit (or “Grexit”) from the EU would irreparably weaken the EU and set in motion the complete disintegration of the Euro as a single currency–much like Slovenia’s early exit from Yugoslavia led to the entire collapse of that Balkan federation? So, who has more to lose if Greece leaves the EU?

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