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Have time, will read – exit the euro they say again! January 23, 2012

Posted by proeconomia in Main, News on Greece, On the crisis, Opinion.

A selection of fine articles for you to read all day. Here we go:

First, three articles from Project Syndicate: PimCo’s Mohamed El-Erian for restoring liquidity to the markets; Robert Skidelsky as to whether the debt matters; and Haruhiko Kuroda about the “year of the black water dragon” (indeed today is the new lunar year and 2012 is the year of the dragon!) They are all excellent and are worth your time reading them.

Second, a post from CNN kindly sent  by our colleague Henry Thomson @ Auburn.  The theme is familiar, the benefits of exiting the euro and has a comparison between Argentina and Latvia and also has a link to this paper that talks about it. The arguments are familiar but the main question still remains: what will Greece export if it were to exit the euro and in what quantities? In fact, here are some data (source 1 here and source 2 here): (1) Argentina does belong to a custom’s union Mercosur; (2)  the largest part of Argentine’s exports are of agricultural origin of vital food stuffs (54%) and 31% was of industrial manufactures, a lot of it cars to Brazil. For the foodstuffs Argentina’s primary export commodities include soybeans, wheat and corn plus it exports some oil (of which it has reserves as it has natural gas). The main export partners of Argentina are Brazil, China, the US, Chile and the Netherlands. Could someone please make the comparison with what Greece is able to produce that will take us out of our misery? Olive oil and wines are not items of such magnitude as soybeans, wheat and corn, we have no oil and we make no cars…Tourism is OK, as is shipping, but both tourism and shipping have a vastly different structure and networking than agriculture and manufacturing (by the way the value added of agriculture in Greek GDP is about 5%). Exiting the euro would be a viable strategy if the country could survive on its export structure, generate employment for these sectors and compete with global giants by generating enough new fixed investments. Finally, could someone please consider the income re-distribution issues from such a move (and link it to sectoral tax evasion in Greece?!)



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