Your handy #Grexit calculator

One Response to Your handy #Grexit calculator

1. Martin Novar says:

   July 7, 2015 at 3:44 pm

   My thoughts are simply that Greece, Spain, Italy and Portugal are subsidizing Germany by keeping the Euro abnormally cheap. If they were to leave the Eurozone, the Euro would appreciate, as the Mark would if Germany were to go it alone. The cheaper Euro allows Germany to export more and live better at the expense of others.

   In the Monetary Union there is no currency to devalue to restore an equilibrium, attract investment and spur exports, and the “internal devaluation” as the economists are calling austerity, is not working. You cannot shrink your way to growth and wasting a generation of Southern Europeans is heartless.

   My idea is to create a Euro Jr., maybe a Red Euro, and the Sr. Euro could be a Blue Euro. The Red Euro could be devalued to 65% (or so) of the Blue Euro and Spain, Italy, Greece, and Portugal could be in the Red Euro zone. This devaluation would kick start their economies and, over time, if feasible, the two Euros could converge. But with each Euro floating against each other and the other world currencies, the economies would behave more rationally.

   The Great European experiment would be saved.

   The Blue Euro zone would suffer some as their currency appreciates as it is no longer subsidized by the suffering of the Southern European countries. The Eastern European EU members would have to choose which Euro they want.

   Of course, Greece’s legal, pension and tax systems would still have to be reformed to reflect modern standards and the debt would still have to be restructured to reflect that it is largely a function of Germany’s domestic policy of bailing out their own banks who should have been allowed to collapse after making the untenable loans to Greece in the first place.

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