Why Greece will do just about anything to stay in the Euro (part 2)
Two weeks ago I was told I was a) economically illiterate; b) talking defeatist ‘cobblers’ for arguing, against the leftie consensus, that the Left should get right behind SYRZIA and other anti-austerity parties as they do what they must do to stay in the euro.
I argued that the pain would be just too much to bear, and that far from being a decisive act for socialism, leaving the euro could simply tear the country apart, with untold consequences.
Now the National Bank of Greece has set out in numbers what will happen to ordinary Greeks if Greece is forced out:
Per-capita income would drop by at least 55 percent in euro terms as a new currency would depreciate by about 65 percent, according to the report, emailed from the bank today. The recession would deepen by about 22 percent at stable prices, adding to the 14 percent recorded in the 2009 to 2011 period, National said, while unemployment would jump to 34 percent and inflation rise to above 30 percent, pushed up by the higher cost of imported goods.
Greeks know this. This is why SYRZIA may not win the elections, despite being front runners. People may feel it’s simply too dangerous.
Better for SYRZIA to talk up the ‘nuclear option, in the knowledge that Merkel and co will most likely blink first, but to have some form of compromise lined up if need be.
Greece will and must do what it can stay in the euro, though capital flight and bank withdrawals might just mean it’s already too late.
And we should support them in that.