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Greek Euro-Exit Moonscape Result May Threaten Drachma Choice June 6, 2012

Posted by proeconomia in Fiscal policy, Main, Monetary policy, News on Greece, On the crisis, Opinion.
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And another interesting article from Bloomberg. After quite some time, and possibly because of the increased uncertainty such a scenario creates, here is an excerpt:

“A post-euro Greece, a country whose economy is about the size of the U.S. state of Maryland, may face defunct banks, collapsing businesses, skyrocketing import prices, soaring national debt, food rationing and even violent demonstrations, according to a dozen economists, analysts and professors. Even the normal reward of a currency devaluation, cheaper exports, would help little in a country where manufacturing accounts for only 10 percent of gross domestic product.”

And here is what an Argentine has to say about us, in the drachma-scenario: “There would be a run on deposits and banks would only be left with transactional money,” Guillermo Nielsen, who became finance secretary in 2002, months after Argentina defaulted on $95 billion of debt, said by phone from Buenos Aires. The result would be more income disparity, between those who have access to cash and those who don’t. It would become a third- world country.”

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