There it is again: the Grexit. About two years after the discussion of the Greek exit from the euro zone debt by cutting and rescue program the other euro countries was completed, they surged earlier this week again. This is due to the elections, which after the failed election of a president now be necessary according to Greek Constitution. On January 25, the Greeks will proceed to the polls to elect a new parliament and that a new government. If it is after politicians and economists, especially from Germany, goes, they are thereby also vote on the future of their country in the common currency
The fear is namely in Northern Europe. The fear that Alexis Tsipras of the left-wing populist party SYRIZA wins the elections and the future is the head of government in Athens. And Tsipras has a clear in the past several times: it is an end to the prescribed by the troika of the EU, ECB and IMF austerity measures. These austerity measures were, however, have been set as a condition for the present and future aid. Greece announces it on would flow any more money, they say, according to media reports, now in Berlin. Officially corresponding scenarios are rejected because they had not taken part in “speculation”. The possible consequence of these scenarios would indeed be a default and exit from the euro zone.
dispute the economists. Parallel to this political discussion, there are also a stalwart among economists debate. And the question of whether an exit from the euro zone would not be even better -. Not only for the other euro countries, but also for Greece itself, which would thus regain sovereignty over the exchange rate of its currency
main representative of this line is the head of the Munich Ifo Institute, Hans-Werner Sinn. He recommended last this week a Greek exit from the euro as the country only “prepared by devaluing its currency’s competitiveness again” could. Argument is meaning relies on a study of his institute from 2012, in reference to recent currency crises, the potential consequences of Grexit were calculated (“Greek exit from the European Monetary Union: Past experiences, macroeconomic consequences and organizational implementation”).
In this study the legal problems – including a withdrawal from the EU is at a euro exit, according to current law, necessary – deliberately pushed aside and considered only the economic effects. Serves as a model for especially the situation of Argentina in 2002. The country had even before its own currency – the peso. This, however, was linked in a fixed relationship to the US dollar since 1991, so “developed the Latin American country like Greece since its euro membership.”
As in Greece boomed first of all, the economy, and the country depreciated over its competitors on strong. The result was declining competitiveness and huge current account deficits. As Greece tried by “internal devaluation” this problem Argentina – ie falling prices and wages – to solve. “This devaluation was not sufficient to increase the competitiveness.” At the turn of 2001/2002 it came to national bankruptcy, which is why the government released the exchange rate. The peso plunged by 70 percent. As a result, although there was a brief recession that cost five percent of GDP. After just one year, Argentina was but back on the road to recovery, which a renewed boom followed (that again economic policy mistakes were made in this, is another matter).
As Greece from 2001 to the end 2009 compared to the major trading partners – calculated on the basis of unit labor costs – has appreciated by 28 percent and the Greek economy, too inflexible, unlike those of Ireland for a rigorous internal devaluation, a Euro-exit, including depreciation of new, old drachma was therefore the best step to bring Greece back on its feet, writes the Ifo.
This is contradicted by Guntram Wolff, head of the Brussels Bruegel Institute. He published this week an analysis, according to the Greek currency devaluation would not benefit. As evidence he considers the Greek current account, which was recently upgraded from a drop of 15 percent in 2008 to a slight increase. However, the majority of this improvement was not less via a more in exports, but an on imports, according to Wolff. This shows that the structure of the Greek economy is not simply am good for an export economy – even if prices fall. A currency devaluation would therefore have little positive effects.
HoweverThis is probably the Ifo in Munich have a few surprises. Did the Germans but even in its 2012 study found that the competition improvement will be reflected mainly in the substitution of imports. Until then, Greece had an import surplus not only on machines but also in many foods such as cereal and milk or simple metal goods. “Only in fish, fruits, fats and oils and tobacco is sold abroad more than bought there,” the study says. It could also have positive effects on tourism giving, at the 2010 Greece was more expensive by 44 percent than the neighboring Turkey. Since then, the Greek wages have fallen by 18 percent, but the difference is still clearly noticeable.
Difficult implementation. A euro exit would have some disadvantages. The most important: The quoted in euros and issued under international law debt would remain in full, which would drive up the debt with a blow up. A fresh haircut would be unavoidable. This problem has Ifo but also in internal devaluation by price and wage cuts. For here, the repayment capacity of the borrower is reduced – in relative terms so the guilt increases
The most serious problem would be the implementation of a Euro-exit.. In this it must “give unconditional secrecy in the preparatory phase” a to prevent a bank run. And then was this – and the accompanying chaos – can not be excluded. So it was once in Argentina. . Velvet street battles with “20 deaths and years of political instability”
28
Percent Pick Greece against its major trading partners from 2001 to the end of 2009 – calculated based on unit labor costs.
44
Percent the country in 2010 was more expensive in tourism to Turkey.
18
Percent , wages are lower today than in 2007. This is a tremendous effort. The question remains whether it is sufficient
.
(“Die Presse”, print edition, 11/1/2015)
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