News0 min ago
The True Cost to Greece on Leaving the Euro
At last someone's actually put to paper what the actual damage to just the Greek economy will be, and as this comes directly from the Bank of Greece I think we should take note.
Speaking for myself, I know I wouldn't fancy waking up one day just to find I'd lost 55%+ of my Gross Pay, let alone 30% VAT on everything I bought.
Could we seal the borders for Greek passport holders - probably not? But SHOULD we.......? Discuss
Here's the full news article http://
Speaking for myself, I know I wouldn't fancy waking up one day just to find I'd lost 55%+ of my Gross Pay, let alone 30% VAT on everything I bought.
Could we seal the borders for Greek passport holders - probably not? But SHOULD we.......? Discuss
Here's the full news article http://
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It’s not entirely a matter of propaganda.
Should Greece revert to the Drachma it would immediately lose about half its value against other currencies. The main reason for this is that since joining the euro the wealth of the Greeks, at government, business and personal level has increased considerably and at a rate out of all proportion to the nation’s productivity or competitiveness.
The problem that Greece (and other nations) faces as a result of their membership of the single currency is they are locked into using a currency that their economy cannot afford. They cannot adjust the value of their currency against others; they cannot adjust their interest rates to suit their economic circumstances; they cannot print more cash to inflate their way out of debt. The only alternative for them is a generation (or more) of severe austerity in an effort to repay the huge debts they have been encouraged to incur over the past ten years (an effort which will prove unsuccessful).
There is no real balancing argument to make except to say that, of the two scenarios, leaving the euro is probably the lesser of two evils. It’s payback time, plain and simple and my own view is that Greece has very little option but to quit the euro. It will be in their long term interest to do so but by itself will not lead to stability in the euro zone and the wider world. Only a complete reconsideration of the ridiculously flawed single currency will achieve that.
Should Greece revert to the Drachma it would immediately lose about half its value against other currencies. The main reason for this is that since joining the euro the wealth of the Greeks, at government, business and personal level has increased considerably and at a rate out of all proportion to the nation’s productivity or competitiveness.
The problem that Greece (and other nations) faces as a result of their membership of the single currency is they are locked into using a currency that their economy cannot afford. They cannot adjust the value of their currency against others; they cannot adjust their interest rates to suit their economic circumstances; they cannot print more cash to inflate their way out of debt. The only alternative for them is a generation (or more) of severe austerity in an effort to repay the huge debts they have been encouraged to incur over the past ten years (an effort which will prove unsuccessful).
There is no real balancing argument to make except to say that, of the two scenarios, leaving the euro is probably the lesser of two evils. It’s payback time, plain and simple and my own view is that Greece has very little option but to quit the euro. It will be in their long term interest to do so but by itself will not lead to stability in the euro zone and the wider world. Only a complete reconsideration of the ridiculously flawed single currency will achieve that.
No, to my knowledge it's possible Greece will leave the single currency not to EU itself. Citizens of EU member countries have a right of free movement, habitation and work in any other member country so no we shouldn't ' seal our borders' or anything else hysterical and illegal. Remember we also are not part of the single currency, so should the rest of Europe do that to us? I just wish everyone would stop acting as though the sky is falling because they picked lousy governments who strangle growth.
If Greece remained in Europe (and we also reamin) then they have every right to come here, but why should they? If their wealth in Greece is reduced then it wont help them to come here. As other nations have found out, coming here is expensive and the streets are not pved with gold (just rain and dog mess).
The best thing for anyone there to do would be to move their Euros to either another country (all Euros are not the same each country generates it own and they can be identified) or change what they have into dollars/Sterling whatever.
for most their 'wealth' is probably in property and, for most, the value of your home is a nominal value as you have to live somewhere.
Short term its a hit to leave, but a correctly balances currency and economy will see them pick up muc faster than being strangled by Germany and France, no matter what the pro Euro propaganderists tell you
The best thing for anyone there to do would be to move their Euros to either another country (all Euros are not the same each country generates it own and they can be identified) or change what they have into dollars/Sterling whatever.
for most their 'wealth' is probably in property and, for most, the value of your home is a nominal value as you have to live somewhere.
Short term its a hit to leave, but a correctly balances currency and economy will see them pick up muc faster than being strangled by Germany and France, no matter what the pro Euro propaganderists tell you
One of the best suggestions I heard was to have parallel currencies running in Greece.... the Euro and the Drachma. Workers would be paid their true value in Drachmas and could buy the necessities in the same currency. This currency would be allowed to float and you could have a devaluation in the Drachma to find its real worth.
Any other alternative seems doomed to failure.
Any other alternative seems doomed to failure.
To me the problem seems to boil down to the fact that Greece has no real economic assets with which to get herself out of the mire. Greece has very few manufacturing bases, industries or exports, nor is Greece known as a centre of insurance or banking. In fact, Greece's only real income in recent years is derived from tourism.
It's all very well beating Greece over the head for borrowing and spending but that obviously isn't the answer. To privatise state assets and sell off public institutions is like telling a workman to pay his debts by selling his tools. That pays the bills in the short term but it destroys his chances in the long term.
As with everyone else, if I knew the answer I wouldn't be sitting here but I'd be in Greece making millions. However, we can all see that austerity measures don't work. They are just hurting the Greek populace with no prospect of success.
It's all very well beating Greece over the head for borrowing and spending but that obviously isn't the answer. To privatise state assets and sell off public institutions is like telling a workman to pay his debts by selling his tools. That pays the bills in the short term but it destroys his chances in the long term.
As with everyone else, if I knew the answer I wouldn't be sitting here but I'd be in Greece making millions. However, we can all see that austerity measures don't work. They are just hurting the Greek populace with no prospect of success.
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