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Thread: Why are the Greeks so keen on the Euro?

  1. #1

    Why are the Greeks so keen on the Euro?

    A survey by pollster GPO last month showed that 56.2 percent of respondents preferred a “bad” deal with creditors than euro exit, while 35.4 percent said a return to the national currency would be preferable to more austerity."

    Many of us who lived through "Black Wednesday", when the £ crashed out of the ERM, have experienced the strains and stresses of trying to peg the currencies of diverse economies to a fixed exchange rate and understand that, in its present form, the Euro is the problem for Greece, not the solution. Why, even when voting "against austerity", are the Greek people so wedded to the Euro? 'Grexit', the reinstatement of the drachma and devaluation would be painful in the short term - though probably no more so than what is going on now without an end in sight - and would set a floor under the Greek economy from which it could begin to grow again.

    Any Greeks out there care to explain why the people persist in clinging to this currency which is strangling them?

  2. #2

  3. #3
    Basically because Greeks see themselves as Europeans, and the Euro as the tangible symbol of their membership of the EU. Moreover, while Grexit would almost certainly be better for Greece in the long term, the government had no mandate to pursue it, and the short-term pain of a Grexit would be so great that no-one would willingly endure it. Quite aside from the fact that Grexit would entail the humiliation of accepting 'humanitarian aid' from Germany and others in the transition to a new currency.

  4. #4
    chazza,
    But that's what I don't understand. To take your points in order -
    1) As shown by ourselves and 9 other EU countries, you don't have to be a member of the Eurozone to be a member of the EU
    2) "while Grexit would almost certainly be better for Greece in the long term, the government had no mandate to pursue it". Why not? The referendum made absolutely no reference to staying in the Euro, it simply asked whether the voters accepted the terms offered by the Troika and they said "no".
    3) "the short-term pain of a Grexit would be so great that no-one would willingly endure it". Possibly, but the choice is between short-term pain and long-term pain. The appear to have chosen the latter.
    4) "Grexit would entail the humiliation of accepting 'humanitarian aid' from Germany and others in the transition to a new currency". What? As opposed to the humiliation of having your assets seized while the creditors tell you how to run your economy?

    I don't get it. What do the Greek people think they're gaining by clinging on to the Euro? Lance the boil, take the short-term pain and start again - all within, and with the support of, the EU.

  5. #5
    on the first point, it is only those countries that were members of the EC / EU before the introduction of the Euro that are not obliged to adopt it. Others are expected to to adopt it in due course, and most already peg their currencies to the Euro in anticipation of their doing so. Joining the Eurozone was supposed to be a one-way street toward ever closer union, so once in, all members were expected to stay in; there is no mechanism for withdrawing. So Greece, once in, is in for the duration. 'Grexit' was only ever an option for Euro-skeptics (people skeptical about the Euro, if not the EU), who include SchaŁble.

    on the other points, reason and rational calculation are less important than emotion and symbolism. The Greek national psyche is still scarred by 500 years of Ottoman rule, and every Greek I know is desperate to retain a European identity. Very few Greeks who said 'oxi' in the referendum imagined they were voting no to the Euro, let alone to the EU (and remember that there were those who were saying that leaving the Euro entailed leaving the EU).

  6. #6
    Just a simple trap used for centuries by the ruling elite. You lend at a certain interest rate which you hope will strangle the debtor and hold him to payments to you forever. Let him do the work and you live on his back.

    If he manages to pay back then you lend him more and more until he believes that he can actually live beyond his means forever. When he gets to a position where the interest is more than he needs to live then you have him, you move in and buy up all the assets for a song.

    If this is done by a coniving corrupt government and ruling elite then the ordinary people have no idea what is happening, just keep spending other people's money and be distracted by the media hype.

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