Regardless of when they change and no matter what they change to, prices will remain high and after they leave the Euro it will become much easier for Europeans to travel to Greece. As of now, one Euro is equal to 340.75 Greek drachmas, the currency they formerly used. Because of this exchange rate, Europeans will be able to cheaply travel to Greece. Should Greece make this change and Europeans frequently travel there, will this give a large enough boost to their economy that it can fix itself? The economy has been so devastated by the financial crisis that it would most likely take many years of tourism before their economy would stabilize.
Monday, April 8, 2013
Greeks Exit Euro, Europeans Enter Greece?
Former leader of the Greek political party SYRIZA, Alekos Alevanos, has come up with a “Plan B” to assist the ailing Greek economy; leave the Euro. Over the past few months he has “criticized the party he used to lead, arguing that its goal of rejecting the terms of the EU-IMF bailout but remaining in the single currency was not credible,” (www.ekathimerini.com). He also cites the recent treatment of Cyprus by the Eurozone as more reason to exit now and look for alternatives. As he advocates for exiting the Euro he is not saying that they will return to the drachma, but that something must change regardless. This article was written last week, but in an article from a year ago, the same things are said, and it fact they predicted much sooner. “‘The Europeans aren’t going to give them the money, the International Monetary Fund’s not going to give them an OK. They will be out of money in June,’” (www.bloomberg.com).
Subscribe to:
Post Comments (Atom)
I find the Greece situation very interesting. Looking into it, I read that though tourism is a leading source of revenue for the state, the social and political unrest that would undoubtedly have a big negative impact on the tourism industry. Greece, therefore, can't solely rely on tourism to stabilize. Having the country leave the Eurozone seems like a good call in the long run, but it will definitely have drastic short term consequences.
ReplyDeleteThe issue about increased travel if Greece exits the Euro is interesting. I haven't thought of the effects a Greek currency devaluation would have of travel. Accord to Wikipedia travel made up 18.3% of their GDP in 2008, which is fairly large. Also, how did you get the calculation for what the Greek Drachma is worth if they are no longer using it?
ReplyDeleteThe issue about increased travel if Greece exits the Euro is interesting. I haven't thought of the effects a Greek currency devaluation would have of travel. Accord to Wikipedia travel made up 18.3% of their GDP in 2008, which is fairly large. Also, how did you get the calculation for what the Greek Drachma is worth if they are no longer using it?
ReplyDeleteAgreeing with Thomas, although tourism is a significant source of revenue, the unrest intimately deters away a lot of tourism. Having Greece revert back to the Drachma would have very negative effects on the the economic situation. I believe it would only make it worse.
ReplyDelete