In the past, most of us would associate Greece with sandy beaches, clear blue waters, magnificent structures, greek gods etc.
Unfortunately, most of us would just think of the debt crisis now whenever Greece comes to mind. 🙁
This question was posed during class on tuesday: should Greece exit the eurozone?
There are both sides to the coin, but I’d say NO. Leaving the eurozone would bring on a host of other problems and it might worsen their current financial and economic situation. One of the features of being in the eurozone is the common currency they have. If Greece leaves the eurozone, the currency would have to be converted to Drachmas, which is of much lower value. Greek banks will face hoards of people running to banks to pull their money out before their money gets converted to Drachmas. With the current economic state Greece is in, I highly doubt the government would have sufficient capital to fund the banks in order to absorb their losses, hence leading to bank bankruptcy. Other problems will surface too like higher import costs and also, social problems when people start noticing their increased cost of living.
Kicking Greece out of the eurozone would not help solve anything. Their debt will still remain. In fact, I think it’ll bring a chain reaction of even more problems. Instead, I think Greece should undertake austerity measures by cutting down their expenses, which includes pensions and benefits that the Greeks currently enjoy.
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