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I'm a Greek immigrant kid, so I have some emotional attachment, and lots of family in Greece, but little actual knowledge of life on the streets in Greece since

I'm a Greek immigrant kid, so I have some emotional attachment, and lots of family in Greece, but little actual knowledge of life on the streets in Greece since they joined the Eurozone. That said, it has seemed to me for some time that exiting the Eurozone would be far preferable to this sort of solution, e.g. one that leaves the debt high and lets Germany force austerity measures down into the local economy. Isn't precisely what is required right now massive currency inflation, leading to far cheapened Greek exports (tourism and olive oil?). I would love to buy a villa in Greece, if I had the cash. And, if the new drachma is issued, and inflates heavily, it will become much less expensive to do so. It seems like the Eurozone has locked in these smaller countries with an import friendly lifestyle; they get Germany-quality goods in without tariffs, and it's emotionally very hard to think about going back.

_rpd 11y ago
Currency devaluation is usually preferred to inflation - that's why exiting the Euro is under consideration, so that there is a local currency to devalue. High inflation erodes savings and discourages investment - it can be socially destabilizing.
- vessenes 11y ago
  Yes, you said it better. I was imagining devaluation. The interviews with Varoufakis are interesting this week; they indicate he had a "don't leave eurozone, but get leverage" plan which involved nationalizing banks and issuing their own 'ious', presumably senior in some ways to their existing debt. Seems like the administration didn't have the stomach for it. I don't think this ends well for Greece, frankly. This kind of authoritarian punishment is what drove Germany into WWII at some level; crushing debt and 'punishing' as a thing you do to countries just isn't a great plan.
  - _rpd 11y ago
    I think the plan is to sacrifice Greece to keep Portugal, Spain and Italy in line. If Spain or Italy starts demanding debt forgiveness, the Euro really will collapse.

_rpd 11y ago

Currency devaluation is usually preferred to inflation - that's why exiting the Euro is under consideration, so that there is a local currency to devalue. High inflation erodes savings and discourages investment - it can be socially destabilizing.

vessenes 11y ago
Yes, you said it better. I was imagining devaluation. The interviews with Varoufakis are interesting this week; they indicate he had a "don't leave eurozone, but get leverage" plan which involved nationalizing banks and issuing their own 'ious', presumably senior in some ways to their existing debt. Seems like the administration didn't have the stomach for it. I don't think this ends well for Greece, frankly. This kind of authoritarian punishment is what drove Germany into WWII at some level; crushing debt and 'punishing' as a thing you do to countries just isn't a great plan.
- _rpd 11y ago
  I think the plan is to sacrifice Greece to keep Portugal, Spain and Italy in line. If Spain or Italy starts demanding debt forgiveness, the Euro really will collapse.