Why Greece should leave the Eurozone

The debate over Greece leaving the Eurozone has been raging for a matter of years now. Some believe that Greece staying in the Eurozone is axiomatic, in that a Greek exit from the Euro would ravage the economy, perhaps causing hyperinflation. Others argue to look at the other side of the coin, and propagate the idea that a Greece exit would attenuate the suffering of the Greek people, as they might only have to suffer for the next 10 years, rather than the next 50. Personally, it is my firm belief; my avowal, if you will, that Greece should leave the eurozone, and start a new era, having ended the old era of economic pain.

Almost at the very command of Angela Merkel, the Greek Prime Minister Alexis Tsipras was forced to impose harsher austerity members than the previous weekend’s “No” vote had suggested. This paves the way for increased value added tax, increased privatisation of organisations previously owned by the state, and an increase in the retirement age, making the years that people have to work longer. The harsh austerity measures outlined in the plan forced on Tsipras make the deterioration of the economy an inevitability, which forces the Greeks to sell public assets. We can all agree on the fact that this is a malfeasance in itself, and that the Greek people should not be subjected to having the public assets sold in the interests of paying down Greece’s loans.

It can be clearly seen that Greece is in the midst of an economic depression. The latest measures imposed on Greece by Merkel will only make this worse, with the economy getting worse by the day. If Greece, however, exits the Euro and returns to the Drachma, they will have a substantially weaker currency on their hands, which will be a massive influence in helping Greece get themselves out of their deflation and debt. If Greece does get out of this negative spiral of deflation, they will be alleviated from the economic stagnation and high unemployment that currently pervades the country. This can only be a good thing, as more people can sustain a living due to an increase in jobs.

Moreover, it is arguable that the Greek economy will find it very hard to recover within the Eurozone. Greece needs a complete devaluation of its currency through a flexible exchange rate in order to make economic growth a likely scenario again. It is clear as a bell that the short term consequences would be quite damning for the Greek people, however this is a far better alternative than the other scenario, in which the people are suffering from hardship and poverty for the next half a century, potentially. This whole saga with Greece has affected other economies as well, which has led to fears of an Italian, or even a Spanish exit. If one of these two countries exits the eurozone, the ramifications of this would be irreversible for the euro and it would likely never bounce back.

Finally, it is a definite fact that this whole drama has caused deep political instability and rifts within the Eurozone, which means that the tension between the people in the Eurozone has never been higher. It was revealed earlier that a majority of German citizens want Greece to exit the Eurozone, and if this is the case, then there will be gargantuan pressure on Angela Merkel to force this to happen (some would argue that she is already exhibiting this). In order to put this tension within the Eurozone to rest, Greece needs to exit so we can have some semblance of peace in the Eurozone. All these factors combined show that it is in the best interests of all the countries involved that Greece does exit the Eurozone, and although this may have significant short-term impacts, it is definitely the best thing to do to secure long term economic prosperity for all involved.

19 Comments Add yours

      1. odeboyz says:

        If there was a US of Europe then the fact that Greece is 2% of the GDP of the Eurozone might help the analysis. The comparator could be Missouri. No-one expects that state to be the equivalent of an independent state with all the responsibilties that that implies. Greece shouldn’t have an independent Central Bank and it shouldn’t be expected to finance the current surge in immigration (from Turkey & elsewhere). The actual figures are trivial in a European context though massive for Greece. A sound blog.

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  1. rajveeronmarkets says:

    well written, eventually a Grexit is inevitable.

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    1. Absolutely. The Greeks cannot tolerate this mindless austerity for much longer.

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  2. richturley says:

    I dont agree with your premise that Greece will be better off out of the Euro. In the short term yes there may be benefit but the long term implications for Greece, Europe and the world are wholly unknown. Prior to European integration Europe was a very fractious place, (see WW1 and WW2) this whole question is not just about Greece it is about the stability of Europe and also the world as Europe plays a global role. Debstabilise Europe and the global stability is questionable.
    That said Greece does not more assistance to allow it to recover and the deal being forced on it is harsh. Greece has gone through enough pain now and debt relief is required from the Europe and from the IMF (who have said as much). Germany needs to stop punishing Greece and look at the long term prosperity of Europe as a whole.

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  3. richturley says:

    Reblogged this on SPECS and commented:
    I dont agree with your premise that Greece will be better off out of the Euro. In the short term yes there may be benefit but the long term implications for Greece, Europe and the world are wholly unknown. Prior to European integration Europe was a very fractious place, (see WW1 and WW2) this whole question is not just about Greece it is about the stability of Europe and also the world as Europe plays a global role. Debstabilise Europe and the global stability is questionable.
    That said Greece does not more assistance to allow it to recover and the deal being forced on it is harsh. Greece has gone through enough pain now and debt relief is required from the Europe and from the IMF (who have said as much). Germany needs to stop punishing Greece and look at the long term prosperity of Europe as a whole.

    Like

  4. Very True…The problem is deep. I have written a post on a simpler topic and would like your feedback via comments. The blog post link is : https://basicsofloans.wordpress.com/2015/07/25/how-will-you-come-to-know-if-a-company-is-making-profit-or-not/

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  5. Bob Row says:

    A well argumented post. Perhaps Greece should explore a transitional money for a limited time as proposed by Silvio Gesell, cited in Keynes work. A measure like that may help to pull the internal market from paralisis and show something positive before return to negotiations on reestructure of the debt.

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  6. Anil says:

    this is wonderful shrey!!!!!!!!!!1111 to mature for a 15 year old……………way to go

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    1. Thank you so much! 🙂

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  7. Anil says:

    Reblogged this on My Notes on Economics.

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  8. Robin Stanley Taylor says:

    I think the problem for the Greeks is that their country was never really fit to leave the kiddie pool and jump in at the deep end. They cooked the books to get into the European Union in the first place and since joining they have continually been either a liability for the project as a whole or the whipping boy for the higher powers.

    Britain has had six parliamentary general elections since 1990, Greece has had eleven. Britain has had four Prime Ministers while Greece has had eight. The SYRIZA government which arrived early in 2015 resigned and went to the polls again after just seven months. Yanis Varoufakis, whom many hailed as the dawn of a new age of politicians, disappeared even before that. Even Brexit Britain seems more stable than the Hellenic Republic is most of the time.

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    1. I agree entirely; they shouldn’t have been able to join the EU in the first place, and their entry raises serious concerns over the EU’s vetting process for new countries that are trying to join, such as Turkey.

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