Facing the Grexit

Could Greece actually leave the Eurozone?

A big switch appears to have been flipped in the last week: talk of Greece exiting the Eurozone has moved from wild blue-sky thinking to the sort of thing Very Serious People write about. The Financial Times is running a series on how such an exit would happen, beginning today with a piece quoting several Eurozone central bankers saying things like:

I guess an amicable divorce – if that was ever needed – would be possible. (Luc Coene, central bank governor of Belgium)


Technically, it [a Greek exit] can be managed… It is not necessarily fatal, but it is not attractive. (Patrick Honohan, Irish central bank governor)

Bloomberg echoed the statements, while Der Spiegel is running a cover that doesn't really need translating:

The macroeconomic issues with a Greek exit – a Grexit – would be immense. Paul Krugman lays out a convincing four-step guide as to how the whole thing could result in the end of the Eurozone, "and we’re talking about months, not years, for this to play out."

Krugman sees a Grexit leading to massive capital flight from Spain and Italy as savers race to move their deposits to Germany. That leads to either capital controls to prevent the exit, or massive (even in the context of those which have already happened) European Central Bank loans to stop the banking systems of those countries failing. Germany then has a choice. Either it becomes a guarantor for Spanish debt indefinitely, while also tolerating a higher level of Eurozone inflation than it has ever been willing to accept before; or the Eurozone breaks up.

Even the smaller issues with a Greek exit are hugely difficult to overcome, though. Currency swaps are normally done with huge levels of planning, and a long period of both currencies running in tandem to enable things like vending machines and electronic systems to switch over. But because the devaluing of a new Drachma would be so strong so quickly, Greece has no real chance to do this. If it decides to leave the Euro, it needs to get it over and done with in very little time.

Last September, Josh Hempton, a hedge fund manager, looked at the closest historical precedent for this high-speed currency swap: the break-up of the Austro-Hungarian Empire:

What they did was put troops on all the borders and made it illegal to take cash (or wire cash!) across borders. Then all Austro-Marks in each country was stamped - converted to Drachma for Greece, Marks for Germany, Peseta for Spain or whatever the currencies of the day were [If someone remembers the 1918 border splits better than me they are welcome to say...]

In this conception all Spanish debts become Peseta debts. All German debts become Mark debts. All Greek debts become Drachma debts. Unstamped currency goes worthless.

If you are going to split the currency I see no alternative to a big bang - and if you do that I see no alternative to troops at the border stopping transfers (and wire transfers) because shifting cash North looks so profitable against a sudden devaluation. Suddenly – and against all historic hope – its time again to guard the French-German (and every other European border) with troops for a week whilst the money is stamped.

Despite the fact that at every stage, the story of how the Eurozone will collapse is credible, there is a peculiar sense of optimism. As Joe Weisenthal writes, though, the thinking seems to be:

A crisis will be averted because to not avert it would be such a disaster. We'll see if that actually holds up.

The world looks to Greece right now Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Show Hide image

“I hate censorship”: Larry King on his journey from prime time TV to Russia Today

The talk show host opens up about interview technique, his unique method of tweeting, and his experience of working with the state-backed channel now known as RT.

The first celebrity interview Larry King did was by chance, in a Miami Beach restaurant. He was a 26-year-old local radio presenter, and had set up his mid-morning show to broadcast from the popular Pumpernik's deli. In walked the singer Bobby Darin, famous for his hit version of “Mack the Knifereleased that year, 1959, and gave the young journalist his first showbiz interview. King has been asking questions ever since.

The 83-year-old US talk show host and household name estimates that he has done around 60,000 interviews in his time. And he’s still going. After 58 years of presenting radio and TV programmes – he hosted the nightly interview show Larry King Live on CNN for 25 years – he now hosts Larry King Now and Politicking with Larry King on RT America (the US output of the channel originally known as Russia Today).

That’s why he has been in London – to publicise his two shows as part of the Russian state-funded network’s tenth anniversary publicity drive.

“I haven’t been here in a long time, and I’m sorry I haven’t been here more because it’s a terrific city,” he says, when I sit down with him at the Mayfair Hotel restaurant. It echoes with light jazz and pristine corporate chatter.

Like a society tortoise, cheeky but reflective, King sits low on a plush leather bench with his head hunched forward. His right hand is planted beside him as an anchor, and his left is reserved for banging the table and gesticulating. He wears stylish black thick-rimmed glasses, and the rest of his outfit is every bit the smart-casual elderly hack: jeans and a blazer, stripy tie clashing with the stripes on his shirt.

“The only thing – you cannot find a good cawffee. Maybe it’s the wadda?”

An almost stereotypical born-and-bred New Yorker’s response to being away from home – his Brooklyn roots brought even closer with his assertion that he loves the “Bridish sensa yumour”, in spite of our nasty water.

Known for his laidback, non-confrontational interview style and array of high-profile subjects – Donald Trump, Morrissey, Muammar Gaddafi, Oprah Winfrey, Robin Williams, Michelle Obama, Barbra Streisand, Marlon Brando, the Dalai Lama, Frank Sinatra and Vladimir Putin are just a few – King left Larry King Live in 2010.

It was the preening tabloid troublemaker Piers Morgan who replaced him on the prime time slot in January 2011. But Piers Morgan Tonight was a doomed venture, axed in March 2014 after plummeting ratings. King and Morgan’s relationship has been fraught, with the former calling his successor “oversold” and accusing him of making the show “all about him. He used the word ‘I’ a lot.”

In a characteristically classy response, Morgan tweeted: “I made my CNN show all about gun control & saving lives. You made yours about blowing smoke up celebrity backsides.”

He also called King an “old goat”.

King doesn’t want to discuss this spat, but warns against talk show hosts who make interviews about themselves.

“I don't use the word ‘I’, because I find, in interviewing, for my style, ‘I’ is irrelevant because the subject is not me. The subject is the guest. What I think is immaterial; my role is a conduit from the guest to the audience.”

Perhaps this detachment dispelled any qualms King may have had about hosting two shows on the often laughably biased Kremlin-backed propaganda channel. He doesn’t seem happy about some of his broadcaster’s activities though.

“I certainly vehemently disagree with the position they take on homosexuals – that's absurd to me,” he frowns. “ . . . If they say homosexuality is, like, whatever they say, all I know is, I've asked this question all my life . . . I’m heterosexual. I have no idea why. A homosexual can’t tell me why they’re attracted to people of the same sex, just as the heterosexual. You could tell me I like that skirt, I like high heels, but I don’t know why. I just know that it’s true. So I don’t understand why a state could tell people how to feel about other people.”

But he insists: “They [RT] have never censored me, or told me who to have as a guest, or not have as a guest. They distribute my show. I do the show for Ora TV [an internet network], and I have a wonderful working agreement with RT . . .

“I hate censorship of any kind, abhor it, so I would never approve of you telling me what I can say, or I telling you what you can say. And I've never been censored – in fact, my whole life – by anyone. I've been fortunate. I’ve never been told ‘don’t book this guest’, ‘don’t ask this question’, ‘don’t reveal this’. And it’s never happened to me with RT . . . If they do it, I disagree with it.

He adds: “State ruling against any individual thought is abhorrent to me. I don’t like dictatorships, I don’t like fascism, I don't like communism. I don't like ‘isms’.”

Perhaps King’s thirst for freedom is best expressed through his Twitter feed. His odd one-sentence proverbs about life’s banalities have become something of internet legend – ie articles have been written about them. Here are some examples:

“I like the smell of turpentine.”

“I've been having a hard time finding Nestlé's Crunch bars lately.”

“I don't know why, but I've never enjoyed drinking water.”

“I know about tonsils, but what is an adenoid?”

“The fear of a colonoscopy is unwarranted.”

“The rat is perfectly named.”

“Are there any babies being named Fred these days? #itsmy2cents”

“It seems to me women don't wear ankle bracelets anymore. #itsmy2cents”

“Where exactly is the Internet? #ItsMy2cents”

That final example makes the most sense considering King’s strange relationship with Twitter, and modern technology in general. He doesn’t type any of his tweets himself, preferring – when he has an idea he’d like to impart to his 2.62m followers – to pick up his chunky old black flip-phone, call his producer or assistant, and dictate his thoughts. Sometimes he dictates them directly to his wife. He proudly takes his phone out of his jacket pocket to show me.

“It's a relic, but it's my relic. I don't text, I don't like texting. I like talking . . . I use the internet to my advantage, in that I dictate tweets. But I don't read a lot of tweets. I don't know where to read ‘em! Because this phone doesn't get tweets . . . I just call a number, and the person who answers it sends them out. Why do I have to type them?”

He gestures to the three PRs (yes, three) sitting in on our interview, all of them on their smartphones. “Before I had a heart attack years ago, I used to smoke three packs of cigarettes a day. Cigarettes controlled me. When I woke up in the morning, before I put on glasses, before I got out of bed, I had to reach for that pack of cigarettes. It controlled me. Now, look at this,” he points at them as they sheepishly look up from their phones. “See that? I never want to be a victim again of anything.”

In spite of his one-way use of technology, King is plugged in to internet controversy. He nods when I bring up the recent story of Vanity Fair angering readers with a feature celebrating late-night talk show hosts illustrated with a photograph of ten suited hosts – all of them men.

“I don't know why [there are so few women presenters],” he says, but doesn’t shrug it off. He continues talking about the subject even after our interview is over and I’ve stood up to leave. “It’s also true about radio talk shows . . . If you turn on the radio in the morning, the man is the host. Why? I've never hired people, I don't run a station. I remember this story, it's true, but I don't know why. I've no idea. Why is the man the host of a morning radio show?”

He pauses and then barks: “Why on local TV are all the weathermen women? And they all wear tight dresses. Why is that? I want men weathermen. More men on the weather! Show me a picture of all the male weathermen on local TV.”

That would make a vintage Larry King tweet. He’d better dial it in sharpish.

Anoosh Chakelian is deputy web editor at the New Statesman.