ATHENS, Dec 31 — Greece would suffer disastrous consequences if it ditched the euro for the drachma, the country’s central banker said in a newspaper interview, warning that such a move would result in a massive devaluation.
“A return to the drachma would mean real hell, at least in the first years,” George Provopoulos, governor of the Bank of Greece, said in an interview with Sunday’s Kathimerini newspaper. “Living standards would plunge. The new currency would be significantly devalued, possibly by up to 60-70 per cent.”
Debt-saddled Greece, which joined the euro in 2001, is struggling to meet the bailout terms set by its international lenders and could default if there is no deal with private bondholders on a debt restructuring before March.
Greece is negotiating a bond swap scheme which is a pivotal part of a second, €130-billion bailout package agreed by euro zone leaders in October. The restructuring aims to cut its debt by €100 billion (RM409 billion) and render it more manageable.
Athens faces bond redemptions of €14.5 billion ($188.23 billion)in March.
Provopoulos said proponents of a return to the drachma were wrong because it would bring the country back decades and undo significant progress.
“I don’t believe Greeks would want to experience such a nightmare scenario which would entail huge risks for the country’s security,” he was quoted as saying. “I am certain that Greeks would not allow a return to the distant past.”
A Kapa Research poll for Sunday’s To Vima newspaper showed more than 77 per cent of Greeks want the coalition government to do all it takes to ensure the country stays in the euro zone, a bloc that now includes 17 countries.
Banks and investment funds have been negotiating with Athens for weeks on a so-called private sector involvement scheme under which they will accept a nominal 50 per cent write-down on their Greek bond holdings in return for a mix of cash and new bonds.
If all ends well, Greece will reduce its debt-to-GDP burden from 160 per cent to 120 per cent by 2020. Failure to reach a deal could trigger wider fallout in the euro zone, which has been trying to cope with a spreading debt crisis.
Echoing these concerns, Greece‘s outgoing representative at the International Monetary Fund, Panagiotis Roumeliotis, told Kathimerini newspaper that Greece could not afford an unsuccessful outcome in talks on the new bailout.
“If the new funding is not secured in time, anything can happen including a default, which h could open the way for Greece‘s exit from the euro zone,” Roumeliotis told the paper.
Gikas Hardouvelis, chief economic adviser to Greek Prime Minister Lucas Papademos, told Real News he was optimistic that the bond swap talks would reach a favourable outcome. — Reuters
[[[ *** RESPONSE *** ]]]
Disastrous? Not really. Bond swap talks are absolute nonsense have no basis in reality. Think “real goods” and “real services”, not monetised debt. If the European Union won’t have Greece or give Greece a fair deal, and Greece returns to it’s own currency like the English retain their pound, Greece could well get the BRICS nations with cash to spare to underwrite them in exchange for various trade and perhaps even trade distribution point or tax concessions, alongside the PIIGS to ensure a viable country with it’s own currency.
Much fiscal autonomy could be lost for a few decades perhaps, but PIIGS nations like Greece would not end up backwoods with depressed economies and enslaved Grecian migrants working in developed EU countries to instead become entrepot or distribution economies, or even be peopled by wealthy migrants from BRICS nations who will doubtless invest and develop the PIIGS nations.
BRICS could ensure PIIGS each have their own currencies AND survive. Who knows even ensure supplies of food and useful goods at special prices to enable Greece and the PIIGS nations to continue their quality of life.
More importantly, it is very dangerous if a Multipolar World Order does not persist. Any hegemony worldwide will result in eventual loss of autonomy by Greece and PIIGS in time anyway so why not be direct challengers of the Euro having own currencies by getting BRICS to underwrite (even effectively take over the financial system) and do wonders over the next few decades? Politically doubtless, the Socialism angle could very well fit into BRICS nations like China and Russia.
How about dropping Capitalism for Socialism with Grecian characteristics? China and Greece are also polytheistic countries with ancient histories, doubtless a good match and probably Greece could learn much about being as successful as China under socialism as uncontrolled Capitalism has it’s heart in the US Fed reserve (nominally also occult Zionism/Illuminism/Masonry) and only views Greece as a underling, not like an equal as China might.
Culturally, it is impossible to be colonized by BRICS nations, as differences and genotypes are clearly visible, and the spin off could be that the PIIGS instead of becoming lost causes and under European (Fed Reserve Global Banking Cartel) control, become powerhouses in EU out of necessity to the BRICS instead. From subject to ruler, Greece, think!
At the end of these few decades, PIIGS could well be controlling the EU instead of the other way around in as soon as a year and at that point could work something else out with the BRICS again – though friendship would have grown much during that time.
Greece should choose the path of moderation in Socialism (wealth distribution, welfare etc..) rather than uncontrolled unsustainable Capitalism (i.e. golder parachutes, globalist controlled quangocrats, etc.) where sequestration of wealth by a handful of plutocrats and cult of personality persist while 99% of the population languish under an increasingly oppressive system of laws and unaccountability.
Greece could lead PIIGS to dominance over EU rather than capitulate to the IMF or World Bank or whatever Fed Reserve Banking Cartel to be equals with BRICS investors as well as give mankind a Multipolar World Order, a safer alternative to a single Banking Cartel / NATO backed hegemon that leads to Iraqs and Pakistans. Take a visit to Iraq and Pakistan then ask them about Capitalism or hegemony for a better idea Greece. Then talk to BRICS, the above suggestion makes perfect sense.
At the end of these few decades, PIIGS could well be controlling the EU instead of the other way around . . .