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Richard Erlacher
02/29/12 20:33
Read: 331 times
Denver, Co
USA


 
#186310 - That's exactly the solution ... however ...
Responding to: Per Westermark's previous message
The Euro-zone would suffer extensive consequences if Greece were to withdraw from the use of the Euro, most notable due to the loss in confidence in the common currency.

Devaluation of Greek currency, i.e. return to the Drachma, would solve part of their problem, but the real problem is in getting a handle on the corrupt practices, starting from within the government, and those which have spread from the government into the "culture" of the society. Similar problems exist in Spain, Portugal, and, above all, Italy, where the practice of income tax evasion has become a national sport. Italy is a large economy and barely able to hang on with its fingernails, so all these countries in nearly so much trouble as Greece need to be handled very delicately. If those five countries go the way that Greece is going, they might well take the entire Euro-zone with them.

France isn't totally without some weaknesses of the same sort, and Germany, however economically powerful it is, cannot be relied upon to have the resources, or the will to expend them, needed to hold up the entire continent.

As for making imported goods more costly, it has been shown that much of the produce sold in Greece, once grown and marketed locally, is from Belgium or other Euro-zone countries, exactly because it is cheaper to produce them in great quantity there rather than in smaller volume and at greater cost in Greece. I'm not saying you're wrong, Per, but it is a fact that it's far too easy to oversimplify the way in which the integration of the Euro-zone has affected the various economies involved. The real problem, IMHO, lies in that the economic barriers between these economies have been taken down, but the cultural and political distinctions between them have not. The smaller economies are typically left-leaning ones, while the larger ones are not so much so.

All this leads to many more questions than answers. Asking them may lead to answers, but probably not very quickly.

RE




List of 21 messages in thread
TopicAuthorDate
Greece Crisis      Satish S Munot      02/29/12 13:06      
   when        Erik Malund      02/29/12 14:42      
      do you mean      AP Charles      05/19/12 00:24      
   Well, ...      Andy Neil      02/29/12 15:33      
      Insufficiant effort      Satish S Munot      03/01/12 00:12      
         war?      Stefan KAnev      03/01/12 02:13      
         war wouldn't solve the problem      Richard Erlacher      03/01/12 06:58      
            War?      Per Westermark      03/01/12 07:22      
               Capital of Greece?      Murray R. Van Luyn      04/29/12 03:06      
   As always...        Kai Klaas      02/29/12 16:23      
      Devaluation of money      Per Westermark      02/29/12 17:01      
         That's exactly the solution ... however ...      Richard Erlacher      02/29/12 20:33      
            Social progress and change is often slow      Per Westermark      03/01/12 03:01      
               (SP)Stander & Poor Ratting      Satish S Munot      03/01/12 10:49      
            return to the Drachma will be cathastrofic      Stefan KAnev      03/01/12 11:38      
               ??      Kai Klaas      03/01/12 13:30      
                  You are right,Kai      Stefan KAnev      03/02/12 00:27      
               I don't agree      Oliver Sedlacek      03/02/12 04:39      
      austerity      Andy Peters      03/03/12 19:34      
         from what I've gleaned from the news ...      Richard Erlacher      03/04/12 08:20      
      New Testament      John D. Maniraj      03/06/12 08:25      

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