Friday, May 6, 2011

Greece Considers Own Currency - Prelude to Bankruptcy? Is the US Next?

Greece's problems are a result of many years of government making promises that it could not keep. Its citizens, after relying on the cradle to grave concept of their liberal politicians, are protesting to keep their unsustainable benefits.

We here in the US have been on a course that is taking us nearer and nearer to the tipping point, where a majority of our citizens rely on government for our well being. Unions are demanding so much from government and, in Wisconsin, looked much like their counterparts in Greece as they rioted to stop attempts at fiscal responsibility.

Obama and his liberal friends in Congress want to push us over the edge. It is up to the sane amongst us to push back before it is too late.

Greece's economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: SPIEGEL ONLINE has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou's government is considering abandoning the euro and reintroducing its own currency.

Sources told SPIEGEL ONLINE that Schäuble intends to seek to prevent Greece from leaving the euro zone if at all possible. He will take with him to the meeting in Luxembourg an internal paper prepared by the experts at his ministry warning of the possible dire consequences if Athens were to drop the euro.

"It would lead to a considerable devaluation of the domestic currency against the euro," the paper states. According to German Finance Ministry estimates, the currency could lose as much as 50 percent of its value, leading to a drastic increase in Greek national debt. Schäuble's staff have calculated that Greece's national deficit would rise to 200 percent of gross domestic product after such a devaluation. "A debt restructuring would be inevitable," his experts warn in the paper. In other words: Greece would go bankrupt.

Read full Spiegel Online article here.

No comments:

Post a Comment