There would be “havoc” if Greece left the euro zone and adopted an alternative currency, Willem Buiter, global chief economist at Citi, told US-network CNBC.
“I really think the notion that Greece exits with or without a shadow currency or a proper currency (is ridiculous). Greece has not, historically, been good at managing an independent currency. This time, if they were to move towards that from a situation of extreme weakness it would be havoc for Greece so I wouldn’t recommend that.”
Buiter believed to have been the first to have coined the now well-known phrase “Grexit” (alluding to a Greek exit from the euro zone -.
Asked whether Greece could exit the 19-country single currency group with some kind of alternative currency tied to the euro, Buiter rebuffed the notion, saying “that would be rubbish.”
However, Willem Buiter believed a default on its debts would “not be the end of the world.”
“A default would of course be serious for Greece and it would cause a re-awakening of sovereign fears throughout the periphery of the euro area but it’s not the beginning of a Grexit necessarily.”
He believed that Greece would stay in the euro zone and should “have serious debt restructuring and serious structural reform in Greece.”
Full interview here.
All of which Varoufakis has been saying for many years, on his blog. And all of which most serious economists agree with. It is only the Germans who are talking about Greece leaving the euro (plus idiot Papandreou in his brief moment of “glory”) — and that itself is an expression of political power, as opposed to a rational solution to economic problems.
Scaremongering! “if Greece leaves the euro the apocalypse will happen”. Truth is no one knows exactly what would happen to Greece, the EU and the world if Greece decided to manage is own currency. A lot would be determined by how that exit is managed by the Greek people itself.
What is certain is that keeping the Euro and trashing austerity/memorandum is a delusion, one that the current Greek Government should stop spreading.
To think that others can treat our house better than ourselves is totally ridiculous. “Greece has not, historically, been good at managing an independent currency.” it has been even worse with a foreign currency on which, de facto, it has no say what so ever has it is the euro.
No one can predict what would a greek exit means, but history can give a preview :
http://www.bloomberg.com/news/articles/2015-05-11/the-lessons-for-greece-s-economy-from-70-currency-union-breakups
Thanks for the link!
“The hardliners in Athens may have a point.
History suggests Greece leaving the euro wouldn’t make catastrophe inevitable, says Adam Slater, lead economist at Oxford Economics Ltd.”
Greece should be prepared to use its own currency instead of the foreign currency it currently uses. As the link here posted clearly states, the talk of “apocalypse will happen if Greece leaves the euro” is plain and simple scaremongering.
Although I get why the banksters dread this scenario, it could lead the way for many others leaving the IVReich Euro and it would make a big dent in the current economic mad house system where the 1% make all the gains and the rest of the pleb is treated like worthless scum.