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My thoughts about Greece and how it can impact the Euro

So it’s no secret that Greece is in debt and chances of repaying the loan are less likely to occur within the maturity period.

Let’s rewind a few years back. We can relate to this since it was the same dynamic played out in Argentina. In 1998 Argentina saw a cyclical recovery under a leftist government though its bad statist policies after a decade later the heavy price for economic mismanagement by the left government is becoming apparent.

Is it safe to say in this case that there is always a mistake to think in terms of “victims and villains”,  which it’s almost how everyone refers to these kind of  situations. In this case, Greece is both victim and villain, but let’s not forget Germany. The Germans can also be blame, not entirely, for a tight money policy responsible for a resurgence of extremism in Europe. The European left is also partly to blame. Their ignorance of monetary economics has resulted in the right dominating the debate over ECB policy. The Greek electorate is also to blame for electing one inefficient government after another, and this last election has been criticized as one of the worse in Greek history.

“Grexit” has been a term used lately for Greece to exile the European Union known as the EURO. So a “Grexit” is a possibility, but ironically. And here’s another irony, a Grexit may be the best solution. As it occurred in Argentina, The new Greek currency would immediately lose half of its value, creating a huge boom in industries such as tourism. Are the Greek aware of this? Is this why they are making expectations they can no longer meet? So should the EURO be part of this downward move because of the Greek, shouldn’t it be much stronger to get rid of an economy that is dragging an entire entity to the ground. Eventually the EURO will recover its strength and the European Dream will be established once again.

Andres Salazar

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