Ripping off the band-aid

This week's release of a new Greece policy document would suggest the Greeks aren't so keen on sticking with the terms of the bailout agreement they signed up to all those years, sorry weeks, ago.

And why not jam your fingers in your ears, close your eyes and tell the rest of Europe to stick it? The Greeks probably feel they're half a chance of getting the rest of them to capitulate out of fear of what might happen in Spain and Italy. Why shuffle off quietly and deal with a grenade on your own, when you can threaten to pull the pin in the middle of the EU party?

And so it goes on. Another week, another summit and another bailout agreement. Worst of all, there doesn't appear to be any end, or certainty in sight.

The financial commentators are divided. Some call for more bailouts, some fiscal unity and others for Greece to be booted out promptly. Paul Keating, at the recent Eureka conference, wanted to give them some cash and kick them out the door. Another article I read recently suggested Germany are the problem and it would be better and easier if they were to exit (a lot of Germans might be feeling the same way).

I've always been a fan of 'ripping the band-aid off' when it comes to problems. I fail to see the point in sidestepping around an obvious issue and hoping it goes away. We've all got a limited time on this planet. Who wants to spend it waiting for ignored problems to jump up and bite?

I am also a believer in our ability to solve problems and/or adapt. Again, if you back yourself to solve a problem or adapt to it, why delay the inevitable?

Back to Greece and their present situation. Europe can spend the rest of the decade working on bailout after bailout while, in the meantime, the life slowly drains out of the Greek economy and population (as some Greeks seek greener pastures elsewhere). Or they could simply 'rip the band-aid off' and see how it pans out. The ripping doesn't need to be a brutal 'you're out'. It could simply be 'look, we really like you guys but we just don't subscribe to your business plan anymore and don't want to invest any more equity'. They might even be able to offer Greece a way to stay in the EU under some sort of 'transitional regime'.

The Greeks, and those with financial exposure to them, may just surprise us with their ability to quickly adapt. Those predicting disaster with a Greek exit may be surprised on the bright side. If there's deals to be done to save their bacon they're only going to happen when the politicians are staring a lack of money to pay the bills in the face. We could, for instance, see a huge red tape cutting exercise, through lack of bureaucrats to administer the red tape.

From Europe's perspective the money they were likely to spend on a never-ending cycle of bailouts could be used to ensure Greek security. Besides, the more money left in Europe, the better chance they have of ensuring Spain and Italy don't have to go down the same path.

At the very least the huge shroud of uncertainty which hangs over the world and it's economy would be lifted. We would know for sure whether things were going to work out fine or if we have a complete financial meltdown on our hands.

Personally, while it may be rocky, I don't think we are going to see financial armageddon off the back of Greece reverting to the drachma and losing access to capital markets. And if we do, well at least we all have more advance notice that we need to change our retirement strategies.