Josh Ferry Woodard

Member Article

Possible benefits of a Greek exit

The Greek election next month is effectively a referendum on whether the Hellenic state is to remain inside the Eurozone. A vote for one of the established parties, either PASOK or New Democracy is a vote for renewed Euro membership, whereas a vote for Alexis Tsipras and his leftwing SYRIZA coalition is a vote for a Greek exit.

Should Greek voters decide to take the latter path then it will trigger an immediate period of desperate contraction and severe economic downturn. But in the long run, Greece should be able to benefit as elevated inflation levels reduce the real value of its debt pile and rapid currency devaluation aids competitiveness in its export and tourism sectors.

If you own a particularly rose-tinted pair of spectacles then it’s conceivable that under these circumstances Greece could even make a concerted push towards returning to growth within the next 3-4 years – something that would remain impossible whilst under the constraints of the single currency.

This was posted in Bdaily's Members' News section by Josh Ferry Woodard .

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