This post represents the views of the author and not those of the Brexit blog, nor the LSE. It post was originally published by Project Syndicate and the Dahrendorf Forum. Copyright: Project Syndicate, Their Parliament ignored the referendum result and voted to accept it. Was there a revolution? Was there civil disobedience on a mass scale?
Were the Greek people betrayed by their own government? No, it seems the Parliament made the right decision for the well being of Greece, not the popular, and misinformed, view of the voters. Would that our Parliament would also vote overwhelmingly to ignore the paper thin result of our referendum for the obvious good of the UK and rescind Article In the Greek referendum, the government asked voters to reject the deal. They actually went so far as to accuse their opponents, i.
When the EU called his bluff, the prime minister decided to change his course and signed a deal. How did he present his decision to the people? Did he apologize for all the lies and the divisive speech? But, with the added self conceit that the UK thinks it is so important to the EU that it will win any negotiation.
A prediction that the UK will be put in its place, in much the same way as Greece was, may well turn out to be correct. Search for:. Roch Dunin-Wasowicz March 7th, The Grexit that never happened offers some lessons for the UK 3 comments 6 shares Estimated reading time: 5 minutes.
Such an option would allow the Greek government to make a new start in stimulating competition, fighting corruption, and otherwise building a basis for long-term growth. This would not be easy, but it would no longer be a process that Greece finds humiliating and creditor countries find exasperating.
The bottom line is that away from the EU , Greece will slip ever further into an economic abyss, characterized by rising income inequality and poverty. This is where most economists, who consider the upsides for Greece of a Grexit, have it wrong. Default and Grexit will only aggravate those structural failings, not only immediately, but also in the medium-term. Ironically, some are arguing that the E. That might not be an immediate concern for other economically weaker countries like Italy, Portugal and Spain, given that yields on their government bonds increased only modestly after the Greek vote.
But the specter of more exits from the eurozone would undoubtedly make it hard for European leaders to respond to future crises. Already a subscriber?
Log in or link your magazine subscription. Account Profile. Sign Out. Most of the businesses in Greece, they have loans in euros. So if Greece is to leave the eurozone, Greek loans will still be denominated in euros. It means that many Greek companies will go bankrupt. For me, Greece going out of the euro is like a disaster for my country. SB: If Greek businesses were to default on their loans, would this affect banks in other European countries? They have over-lent, so they have liabilities of six times the Cypriot GDP.
So you can imagine another Icelandic case emerging in the Mediterranean. They are going to be the immediate victims of everything going on in Greece. SB: Logistically speaking, how difficult is it to take a currency out of circulation and introduce a new currency? EP: Most commentators compare Greece with Argentina. But Greece is not Argentina because Argentina had the peso in circulation when it stopped the peg to the US dollar.
This means that Greece would have to bring the currency to circulate in the economy. And tactically speaking, you need at least four months to create a new currency. And before banks are reopened, the new currency will have devalued, who knows by how much, relative to the initial announced exchange rate. It will take time. SB: Will the results of the recent election in Greece make it more likely that the country will leave the euro? EP: The Greek election results express the anger of the Greek population.
They had somehow to punish the two political parties that have been in power the past 20 years. So they voted in anger and in protest, I guess. I think that the majority of Greek people do not want to leave the euro. I think that most of them realise that leaving the euro is going to be disastrous for Greece.
SB: Would switching to a new currency cause inflation? EP: Of course.
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