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View Diary: Beware of Greeks bearing debt (141 comments)

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  •  Pulling out of the Euro (6+ / 0-)

    Pulling out is not an easy option for Greece.
      You are right that it would cause a massive devaluation of their currency. This would bankrupt the savers of the nation. At the same time foreign creditors wouldn't loan them money until things stabilize.
     Plus, if their debts are priced in Euros, and the Euro doesn't fall, then the debts become unpayable, and default becomes certain.

     Of course the current situation isn't sustainable either. Greek exports are too expensive because of the German-based currency.

    "The people have only as much liberty as they have the intelligence to want & the courage to take." - Emma Goldman

    by gjohnsit on Tue Apr 27, 2010 at 01:17:56 PM PDT

    [ Parent ]

    •  Yeah. Awful choices. (1+ / 0-)
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      It's like one of those complicated unhappy marriages you see from time to time. There just do not seem to be any good options.

      One thing that might help would be for Greece to go into a kind of receivership. So the finances of the country would be subject to an external control board that would create transparency and confidence, and that would in turn put new finance regulations in place to rebuild the Greek economy. But all this has to be combined, it seems to me with a restructuring of the Euro zone. We almost need 2 monetary zones.

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