Sunday, 5 July 2015

Greece Crisis

In this article written by Alice and Rahul, you will embark on a journey which will explain pro's and con's of Greece leaving the Euro (EU).

How did Greece get into the euro?

Greece joined the euro in 2001 but was it a fair join. Many people think not. According to a former European Central Bank (ECB) chief economist, Otman Issing, Greece cheated it's way into the Euro using deception. Goldman Sachs also know as the magician that helped Greece cheat it's way into the Euro. He is know as the magician because of how he made the Greece debt disappear. He made the countries inflation and also the deficit disappear. To join the Euro zone a country must not have a budget deficit of greater than 3% of GDP. This rule was put into reform in 1992 by the Maastricht Treaty. In 2012 a new fiscal treaty was agreed which would ensure that no country that has a budget deficit of greater than 3% of GDP. This is the same rule that was enforced in 1992. Greece were in debt due to the fact that they were spending more than the money that was coming in and this could be because of the export industry. Greece's main export industry is in farming goods such as olives to make olive oil, hallumi  and mainly in agriculture. Greece's largest industry, tourism has also been the key to the money coming in for the country. To join the Euro Greece said that their budget deficit was 1.5%; however the actual figure was 8.3%. This was a 6.8% difference. Even after Greece was exposed there were no actions taken by the Euro.

Greece has now suffered for a great amount of time under in complete and utter economic turmoil. An 'Oxi' vote on Sunday is a rejection of the austerity demands of Greece's international creditors. Tsipras tried to reassure Greeks this week that a vote against the bailout would allow him to sit down with the country's creditors in a stronger negotiating position. The result, he said, would be a new bailout with better terms. The 'troika' of creditors, however, have said that are unwilling to renegotiate. If that's true, and 'No' voters prevail in the referendum, Greece risks an exit from the eurozone.

Being Greek i understand on a more personal level that the once beautiful nation has morphed into a hellhole. Research shows that 551 male greeks committed suicide solely due to fiscal austerity between 2009 to 2010. For the greeks, it can't possibly get any worse. Right at this moment they are under the thumb of Angela Merkel and by staying in the EU one should question if they shall forever be at her call and beck. Its questionable why Merkel feels Greece doesn't deserve to have its debt cut. After all, Germany had half its debt cancelled in 1953 after as a nation that had murdered 11 million people. By leaving the EU Greece will have to start from scratch and build themselves up slowly mending their tarnished country. Yes, it will be an uphill struggle but perhaps they can follow in Iceland's footsteps, a country that when leaving the EU reached new levels of prosperity. Greece has a booming tourist industry something that will hopefully withhold even if Greece leave the EU and maybe even augment due to exchange rates between Greece's step-in currency the 'drachma' and other international currencies. Critics argue such moves would impose too much pain as the rising cost of imports would cause terrible inflation. However, the Greeks have a limited import sector- Greece produces much more of what it consumes that most small nations and its export sector is dominated by shipping , petroleum refining and tourism which would continue to generate lots of receipts in dollars and euros and revitalise the Greek economy.

At the end of the day it is the people of Greece that are suffering and that will further suffer. It easy for us to be lamenting and typing our thoughts and opinions onto the web when the real people, the greek people who are suffering from malnutrition, suicidal thoughts and a loss of all their savings. The vote on Sunday will dictate the fate of the Greek people. One thing is certain, voting 'No' offers Greeks some prospects of better solutions, whereas voting 'Yes' guarantees penury.

Nai - yes

Greece has gone through some tough times in and out of the Euro, however I strongly think that Greece should vote yes and stay in the Euro. As Alice has said , if they say no and leave the Euro they will be able to build their economy but it will be a slow recovery. But is this what the Greek people want? Are they willing to wait a few years to see whether the Greece economy improves or should they vote yes and have  an instant bail out? Greece leaving the Euro may become a seriously wrong decision as the Euro provides the Greek people to travel and trade around other countries in the Euro. It provides people to visit Greece which helps the Greece tourism. In my opinion I do not think that Greece will be able to pick up the pieces if they leave the Euro as it may destroy relationships with other Euro countries. This would lead to a struggle to build the Greek economy of the 'drachma' as they would have left their debt behind. The Greece economy will struggle as it only has minor exports in agriculture and tourism to help build the economy. Will this be enough? I think not.

The vote that will be held today will decide Greece's future?

What will they pick Nai y Oxi?

What would have you picked?

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