Greece exit from Eurozone is inevitable

Eurobonds — basically loans raised by all Eurozone members to fund a bailout of those that cannot service their debts — will do little more than make the problems of some nations, the responsibility of all.

Despite the economic ties that bind them, this is not fair or reasonable on those states who have been responsible in their fiscal policies and whose citizens have fulfilled their duties. It is not unreasonable of Germany to refuse to underwrite a bailout of debt-stricken Eurozone members, despite the fact that it has undeniably benefited from the single currency. The opportunities and benefits of Eurozone membership were there to be had by all.

Eurobonds will also increase the lending costs of all of those who stand security for them. These are among the reasons why German Chancellor Angela Merkel is opposed to the Eurobonds proposed by new French President Francois Hollande, among others. Hollande and company, who cannot afford higher lending costs, can take issue with Merkel when they have the economic and financial resources to issue viable Eurobonds without Germany.

The alternative is that those countries that are struggling with their debt take responsibility for their financial situation and cut their spending through austerity packages. Social sensibilities and political protests cannot change hard economic realities.

But Greece, as only one example, has shown a remarkable lack of commitment to implementing agreements designed to help it make a sustainable — and politically acceptable — recovery. Given this, it is only prudent that Eurozone leaders prepare for a Greek exit from the single currency and the possible impact on their banks and financial markets.

An exit by Greece and other weak member states must happen as soon as possible, despite the desire to keep them in the Eurozone. Their efforts are only dragging out the seemingly inevitable and the financial volatility which is damaging global markets.