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· To make Greeks happy, declare them bankrupt and give them a devalued drachma.

By GEORGE ATHANASSAKOS [Globe and Mail] – The knife has hit the bone, as they say in Greece, and there is not much more Greeks are willing to give. So it will be either social unrest or bankruptcy.

The best scenario would be for Greece to declare bankruptcy, go back to the drachma, and devalue its currency. This money illusion will make Greeks feel better in that their salaries will not get cut in drachma terms even though in essence they will be poorer as all imported goods will cost more. But impressions are everything and the perception of lighter austerity measures may prevent social unrest. At the same time, exports will become cheaper and the Greek economy more competitive, which will boost Greece’s efforts to repair its economy.

Greece has already lost its economic sovereignty and is under economic occupation by the European Union, the International Monetary Fund and the European Central Bank, known as “the Troika.” Greece’s financial system is in such a precarious situation that the cost of remaining in the euro zone may be higher than the cost of what I suggest above.

Although defaulting is easy to explain, make no mistake, it will not be easy to carry out.

Continued at the Globe and Mail | More Chronicle & Notices.

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