On Feb 4, 2015, at 5:30 PM, Louis Proyect <[email protected]> wrote: > On 2/4/15 8:15 PM, Charlie wrote: >> The original Subject line is disingenuous; the article asserts that >> leaving the Eurozone would be detrimental to Greece. > > I was quoting from an article by Elmar Altvater in the Socialist > Register 2012. His credentials are very strong. > > Here's someone else with pretty good credentials: > > Also 80% of Greeks want to stay in the euro. They know that leaving the > Eurozone and the European Union would be no solution. Re-adoption and > devaluation of the drachma would cause the value of Greece’s government > debt, already at 160% of GDP, to soar, probably doubling or trebling. > So any devaluation would have to be followed by a default. Also, > devaluation would not save Greece’s exports of shipping charters – which > are priced in dollars anyway – but default would cause great harm to > Greek banks and Greek savers who own the greatest proportion of Greek > government bonds. They would be wiped out by an outright default. > Converting their assets and liabilities into drachmas, like the > pesofication of deposits in 2000 in Argentina, might keep Greek savers > and banks afloat for a while. But a huge devaluation would also drive > up inflation, making Greek savings worthless. > > https://thenextrecession.wordpress.com/2012/06/05/the-euro-end-game/
>From the above, Michael Roberts, writing in 2012: On top of this, of course, is the serious risk that the Greek people will elect a government totally opposed to its existing Troika austerity package, or at best pledged to ‘renegotiate’ the package. Then that would pose the issue for the Euro leaders about whether to continue to finance Greek banks and the Greek government through the ECB and the EFSF. If that ceased, then Greece would default and the issue of its exit from the euro would become immediate. >From a Reuters dispatch today: (Reuters) - The European Central Bank abruptly canceled its acceptance of Greek bonds in return for funding on Wednesday, shifting the burden onto Athens’ central bank to finance its lenders and isolating Greece unless it strikes a new reform deal. […] The unexpected move followed an appeal from Greece's new leftist government to the ECB to keep its banks afloat as it seeks to negotiate debt relief with its euro zone partners. The ECB has now effectively refused this request, adding to Greece’s problems as Germany rejected any roll-back of agreed austerity policies. he ECB move was a setback for Greece's Varoufakis, who had earlier pledged speedy talks with international lenders on setting up a new program of reform after abandoning its earlier aid plan. It puts Greek banks in a difficult position. Two Greek banks had already begun to tap emergency liquidity assistance from the Bank of Greece after an outflow of deposits accelerated after the victory of the hard left Syriza party in a general election on Jan. 25, banking sources had told Reuters. The health of Greece’s big banks is central to keeping the country afloat. Full: http://www.reuters.com/article/2015/02/04/us-eurozone-greece-idUSKBN0L81FH20150204 _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
