Sunday, September 2, 2012

GLEconomics Club first debate/discussion

Title - Should Greece exit from Euro Zone or not?

Key points

Views of For team

  • Troika lost election and its too difficult now to have democracy in Greece.
  • Being in Euro Zone, will further move Greece towards austerity measures which will intensify the unemployment, inflation, deficit will increase etc
  • Greek should exit from Euro and go back to dracma
    • It will give them political will and governance capacity.
    • It will force Greece to work on their basics such as agriculture, tourism.
    • It will increase the competitivness of Greece in European Union
  • It might take long may be around 25 years but Greek govt. will have more liberty in respect of its public policies to check its exchange rate.
  • Currently Greece is transacting in cheques not Euro. So what they need is currency to transact. They will pay their debt through drachma.

Views of Against team
  • Cyprus banks depends upon greece. If greece defaults, it could lead to economic catastrophe in Cyprus.
  • Exit from Euro, will create an atmosphere of Uncertainty and chaos inside southern EU. It could create pressure on Portugal, Italy and Spain. It may create another financial chaos or systemic risk.
  •  Going back to drachma will almost increase twice the value of imports as it will around half of Euro.

For detailed discussion, please refer to links below

Debate
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