The approaching 17th of
June is remarkable for Greek elections. After the failure to form a coalition
government for the third time Karolos Papoulias, a president of Greece dissolved
a newly elected parliament with a strong opposition for bailout policies. The political
party Syriza led by Alexis Tsipras obtained the second largest amount of seats
in the 300-member parliament with pledges to overturn the austerity measures. So
what are Greek solutions to resolve debt burden?
Opened debates about Greece exit from euro
zone prompted euro zone’s experts to prepare contingency plans even though European
leaders at the informal EC dinner held on 23 May, 2012 declared their desire to
keep Greece in euro area and respect for its commitments. Moreover, it was
ensured that growth and job creation in Greece would be supported through
mobilised European structural funds and other instruments.
However,
if Greek political leaders decide to leave euro zone, how Greece will exchange
euro to drachma? Do Greeks really believe that if, according to the statistical
data of Aggregated Balance Sheet of Monetary Financial
Institutions (MFIs) of Greece for the end of March 2012[1], the €23,233
million banknotes
and coins in circulation as well as the €179,668 million
domestic deposits and repos of non Monetary financial
institutions had been exchanged to drachma, Greece would has been able to
repay €145,637 million outstanding liabilities to Credit
Institutions of euro area and other countries, and cover remaining liabilities
worth of €95,178 million?
[1]
Bank of Greece. Monetary and Banking Statistics http://www.bankofgreece.gr/Pages/en/Statistics/monetary/default.aspx
I think Greece already planned a way to solve this problem, but, will the Greeks cooperate? Business bankruptcies is a hard problem to solve.
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