As 30th June deadline looms another round of Eurozone crisis talks continue in a bid to resolve the Greek debt conundrum, I wanted to understand for myself the key arguments for and against Greece staying in the Eurozone. The implications of a Greek Exit or Grexit are absolutely huge, and of course SEPA is just one impacted area. In this post I present 10 arguments FOR a Greece exit and 10 points AGAINST a Greek exit….
Eurozone Crisis – 10 Reasons Why Greece Should Stay in the Euro…
- Greece exiting the euro, and adopting the drachma, is not suddenly going to fix the country’s deep seated economic problems
- A Greek exit may well exacerbate the country’s current economic problems and lead to widespread social unrest
- Eurozone unity is at stake – other countries, such as Spain, Portugal, Ireland may be fall victim to the domino effect
- Conversely, Eurozone haters will highlight the Greek crisis as a sign that the Euro Project is fundamentally broken and not in the ‘national’ interest — this point could arguably be in the for and against, depending on how you look at it
- Eurozone political unity and with it the ability to create harmonious policy is affected, particularly in areas such as immigration
- A Greek exit could have wider geo-political regional and global consequences – for example, how would a Greek exit impact Russia, Greece’s NATO role?
- If Greece adopted the drachma, some argue it would be worthless and the cost of living in Greece would rise astronomically. Greece would in turn be in melt down, other weaker European economies would start to weaken and Europe would be in a huge crisis
- If Europe goes into crisis, it would create regional and global instability which would lead to aN unprecedented financial crisis – ooooh, is that too alarmist?
- The investment to date (believed to be up to €330 billion) in bailing out Greece is likely to be lost
- Trust – The unity and belief in the Eurozone dream will be lost
Eurozone Crisis – 10 Reasons Why Greece Should Not Stay in the Euro…
- Greece needs to take monetary and budgetary responsibility of its historically irresponsible borrowing and spending
- A Greek exit would of course be troublesome, but in the long run many argue that Greece would have greater control over its own affairs and would bolster its own competitiveness in the region
- It would be a realisation that the European Union is in fact too disparate and the cost of European unity has in fact outweighed the benefits
- European Union austerity measures are crippling the country and its people, which can only be remedied by sovereign control
- The European Union is not really a European Union – how can you have a fair, competitive and true union with so many different countries – with countries like Germany on the one hand and Greece on the other
- A return to the drachma would enable Greece to take control of its own currency and in turn its own economy, and in time enable growth
- Only Greece can fix its borrowing, spending, tax and pension problems – it should be left to independently fix these problems
- Many argue that Greece, along with other countries, should not have been allowed to join the Eurozone in the first place – the figures simply didn’t stack up
- Other Eurozone countries cannot simply continue to plough more euro’s into Greece, and if they do decide to bailout Greece again how long will it be before the next crisis talks or bailout?
- Arguably the euro has not been good for Greece, and while there have always been underlying problems in the economy the euro magnified them and overall weakened the Greek economy – this has been further accentuated by the recent austerity measures
Eurozone & Greek Crisis
As I read through various articles, it became apparent to me that in fact nobody really knows what would be the likely outcome of Greece staying or leaving the euro. The arguments and statistics frankly baffled me and could be used in either argument depending on which side of the fence you sit on. For me, I kind of feel like I’m none the wiser. Sitting in the comfort of my chair in England, and not knowing too much about the economics of Greece it is very easy to form ill judged opinions. It reminds me of a talk I saw recently by Simon Sinek about leadership. In the talk Simon likens leadership to being a parent — supporting, nurturing and disciplining those around you like a parent would their child. Simon gives the example, in hard times would you lay off one of your children…?