The Greek government has been advised by British economists to leave the euro and default on its €300 billion (£255 billion) debt to save its economy.
The Centre for Economics and Business Research (CEBR), a London-based consultancy, has warned Greek ministers they will be unable to escape their debt trap without devaluing their own currency to boost exports. The only way this can happen is if Greece returns to its own currency.
Greek politicians have played down the prospect of abandoning the euro, which could lead to the break-up of the single currency.
Probably good advice for Greece and really bad advice for the rest of Europe. This could get U G L Y.
Q. What’s a Grecian urn?
A. A lot more than he’s worth.
No. 1 is quite correct, on both sides of the conjunction. Friends in England have been predicting this for several weeks. There will be intense political pressure within Greece to do this.
The Euro is an example of what happens when you do a thing by halves — the worst of all possible worlds. Either one currency and one central economic/banking authority (e.g., the U.S.) or multiple floating currency with independent economic authorities. This is like California being part of the U.S. currency system but having its own central banking, its own social security system, military retirement benefits, inability of U.S. government to levy taxes in CA, etc. Then U.S. having to run in and save it and CA taking the next 100 years to pay off U.S. Not going to work. It’s bad enough as it is. Either Europe is going to have to become the United States of Europe or everyone is going to have to be able to float their own currencies. And they’re going to have to decide soon.