The Tundra Tabloids has been reporting this for over a year, that Greece will have to leave the Euro in order to salvage itself, the devaluation of its currency will hurt, but it’s the only real medicine available to see it through the end of tunnel. The only reason why the Eurocrats (with Finland’s Olle Rehn leading the charge) are constructing these Rube Goldberg schemes, is due to political expediency, they want to keep the Euro and their grip on power.
H/T: Fjordman
ECONOMISTS: Greece to leave euro
Some of Denmark’s top economists say that Greece can be expected to leave the euro this year, despite the fact the country is close to reaching agreement on a national debt haircut of some DKK740 billion and therefore a new EU rescue package. The immediate rescue notwithstanding, seven top Danish economists say that the only way to save Greece is for the country to abandon the euro.
“Even with a haircut, the Greeks are in an impossible situation. Their tax infrastructure is terrible and at the same time there is no prospect of growth in the country,” says Aalborg University Economy Professor Per Kongshøj Madsen. The final rescue package for Greece is therefore to abandon the euro, Kongshøj Madsen says, as it will enable them to devalue the Drachma, in turn enabling them to regain the competitiveness needed to revitalise the economy. “In the current situation it is difficult to see any other solution,” Kongshøj Madsen says.
Under the current rescue package, private investors are expected to cancel some 70 per cent of their Greek debt. But even this will only reduce the Greek deficit to 120 per cent of GDP in 2020, compared to the current 160 per cent. But Copenhagen Business School Economy Professor Finn Østrup says that even after such a dramatic rescue “Greek debt will not be sustainable”, with reference to the rule of thumb that debt must be down to 100 per cent of GDP or less to be sustainable.
