Greece is set to drop Euro for its native Drachma currency

Πηγή: The Coming Depression
Nov 8 2011

The first German company apparently already expected with the introduction of the drachma in Greece! The tour operator TUI has sent a letter to Greek hoteliers (available BILDde) the hotel owner now be asked to sign a new contract in the event of a currency changeover.

It states:

“If the euro should not be the currency (…), TUI is entitled to pay the sum of money in the new currency. Der Wechselkurs richtet sich aus an dem von der Regierung vorgegebenen Wechselkurs.” The exchange rate shall be made ​​at the exchange rate set by the government. ”

Background: Experts predict that a new Greek currency could lose shortly after the introduction of up to 60 percent in value. TUI will therefore already now make sure that invoices for the company’s first exchange rate is calculated – possible without a loss in value. Source (1) Translated from German from The Bild

Greece needs to start all over again as a country, and work to become a modern, sophisticated and enlightened society. Really and truly, it needs to begin totally from scratch and without international bankers printing their currency!

Greeks tend to have an exaggerated pride, ethnocentricity and chauvinism to them that precludes any form of honest and painful self-analysis.

Apart from its enormous economic and financial challenges, Greek civic values and principles also require a complete overhaul. Greece still does not recognize any ethnic minorities within its borders; minority rights are non-existent. Everyone is Greek.

Greece is also engaged in an asinine and futile “name dispute” with its northern neighbour, the Republic of Macedonia. This, despite the fact that over 135 nations, including Canada and the United States, recognize the Republic of Macedonia by its constitutional name (which has been an independent state since 1991). Because Greece does not recognize its own ethnic Macedonian minority, and has a dark history in its policy toward and treatment of the Macedonians, it is acting as an obstacle to Macedonia’s accession to the EU and NATO until it revises its name. It is a matter that is not winning Greece any credibility or respect. Even England and Ireland have reached an historic rapprochement, symbolized by Queen Elizabeth’s recent landmark visit to Ireland.

Going bankrupt is the easy part! Changing work ethic and attitudes, reducing government spending, increasing productivity, reducing inflated pensions and then trying to explain to the population where their pensions are gone will be very hard. Forming the EU under one currency may have seemed like a good idea, but when you bring distinct cultures together who have very different views on finances, productivity, work ethic, etc, perhaps this was doomed to failure.

Makes you think that any movement to a North American currency would result in many of the same issues. Canada should NEVER enter into such an arrangement.

This is what happens when a country loses its own currency, and gets tied to a currency that it cannot devalue. The country can live beyond it’s means for many years, not just through government borrowing but through general private access to easy credit via foreign banks and as the debt increases the currency doesn’t devalue greatly…which means that the cost of borrowing stays low until it stops…there is no feed back mechanism to limit access to credit and thus debt. The Euro is the root cause of the economic problems in the smaller EU states (and this was easy to predict as the transition to the Euro made imports so much cheaper but destroyed exports), but the large states like Germany find this arrangement profitable because it drives down the Euro just enough to make German goods competitive on the world market and thus many North Americans are now driving Volkswagens. If Greece drops the Euro, the net long term result will be a rise in the Euro relative to world currencies, and an end to the export boom in Germany.

Pundits’ analysis’ seem to miss two fundamental factors. First, that Greeks have no interest in cleaning up their house. They are perfectly satisfied with the status quo. Have you ever tried to show a Greek a way to work more efficiently? You’d think in light of the current economic situation they’d be more open to improvement competitiveness and efficiency. But alas, they are not. Secondly, the likes of France and Germany have a lot to gain from brining Greece down to its knees and keeping it there.

For either bankruptcy or austerity to be effective, Greeks need a change in their mentality, but sadly, the majority of them aren’t willing. Those who are, leave. And those who have the courage to turn back are unable to be heard over those satisfied with the status quo.

References:

(1) Translated from German from The Bild