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Greece imports a lot -> gets more expensive. Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, t
by lispm 9y ago
Greece imports a lot -> gets more expensive.
Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed.
People also think in economic terms, but the Euro is a political project. Countries like Greece wanted to be in the Eurozone. It was not Germany's wish. It was the wish of Greece and the population of Greece also wanted it - not just the politicians.
Germany actually did not want to have the Euro itself, it agreed to the Euro to get the Reunification. But it agreed on the Euro to be a stable currency, not one that politicians would devalue to gain short term effects.
- readittwice 9y ago> Greece imports a lot -> gets more expensive. I just want to add: This could also be a good thing, since people in Greece are more likely to spend money on goods produced in Greece. This could help their economy.
- lispm 9y agoIt could, but for example Greece lacks energy resources and imports a lot of oil and gas. That's not easy to replace and that still would involve imports. The top imports are fuels, machines/computers, pharmaceuticals, electrical equipment, ships, ...
- petre 9y ago> Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. All pegs are a potential victim of currency speculation. The solution is to end the peg and let the currency float, as it happened to the British Pound/Deutche Mark during the Soros stunt in the 90s or more recently with the Euro/Swiss Franc peg.