Is it so bad to leave the Euro?

Leaving the Euro is supposed to be irreversible.

If a country did threaten to leave the Euro – it was argued it would lead to bank runs, loss of confidence, high unemployment and a serious recession.

But, what if you already have all of these components?

The Greek economy is in dire state. Furthermore, their main creditors are behaving with tremendous short-sightedness, ignorance or either vindictiveness. This is trying to put it politely.

Given how disastrously unsuitable the Greek economy has been in the Eurozone straight-jacket, now is the opportunity to take back economic and political freedom.

It’s not just about money. But, the latest demands of the troika should be impossible for any democratic government to accept.

New currency / devaluation is a possible new start

The fears of leaving the Euro and gaining a new currency are not without foundation. It will be very difficult, especially for a couple of years. But, countries do recover from devaluation. Countries do even recover from hyperinflation.

But, I’m not sure countries can recover from years / decades of austerity and giving all their economic sovereignty over to a foreign power.

 

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By on July 13th, 2015

5 thoughts on “Is it so bad to leave the Euro?

  1. “Furthermore, their main creditors are behaving with tremendous short-sightedness, ignorance or either vindictiveness. This is trying to put it politely.”

    One might say the Greek electorate acted badly in voting in people who promised a miracle. Varoufakis proved not to be the Messiah…more like a very naughty boy. He KNEW Greece could not oay and he KNEW the creditors would want to impose their own terms. He wasted time that might have been better used negotiating debt reduction (call it restructuring but it must include effective reduction) and planning Grexit.

    But I’m not sure people should be held responsible for the actions of governments they elect; many vote against the winners and many who vote for them lack the sophistication to see beyond the sound bites.

    Blame for getting into the mess rests with many, right from the time of Greece joining the EZ.

    Blame for not acting more effectivley recently rests with Syriza, Tsipris and Varoufakis mostly.

  2. Great post, Tejvan! You speak of leaving the EU as an “opportunity to take back economic and political freedom.” Exactly right.

    Paul Krugman on This Week with George Stephanopoulos (5 July 2015) said departure from the European Union creates a kind of “de-legitimization” of the EU… the economic elite who created it were seen as knowing what they were doing, he said, but if Greece leaves the union it says they didn’t know what they were doing. And Krugman said maybe other nations will leave the union — Spain and Portugal were identified explicitly. (This is the best news I’ve heard in a long time.)

    It comes down to one question: Shall we maintain the honor of the European Union, or shall we take back economic and political freedom?

  3. I always thought that leaving the EU would be disastrous. However, given recent events I am beginning to change my tune. Could the UK benefit from relaxed laws from Brussels?

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