Despite crisis Greece doesn't want to give up euro
2011-12-27 16:54:12
Ten years of the euro have left Greece's economy in tatters, but the single currency remains highly popular among Greeks who fear a return to the drachma would be catastrophic.
Politicians never fail to hammer it home, but the polls also confirm it: Greeks want to stay in the eurozone.
"Our position in Europe is non-negotiable," Prime Minister Lucas Papademos said recently.
"Greece is and will remain part of a united Europe and the euro," added Papademos who was governor of the country's central bank when the currency went into circulation a decade ago and went on to become a vice president of the European Central Bank.
Strong support for the euro -- up to 80 percent according to polls -- has held up despite the deep recession and the bitter austerity measures Greece must impose to get its bailout funds.
Unemployment has rocketed, with nearly half of young people now without a job.
Moreover, the possibility of Greece leaving or being forced out of the eurozone is no longer an idea entertained only by the lunatic fringe.
German Chancellor Angela Merkel and French President Nicolas Sarkozy warned Greeks in November that this would be the result if they didn't quickly accept new bailout conditions -- triggering compliance but renewed market unease.
The British weekly The Economist, which has long argued Greece will end up eventually defaulting on its massive debt, recently organised a conference in Athens on a possible exit from the eurozone.
Even former French president Valery Giscard d'Estaing, popular in Greece for his backing of the country joining the European Union, has described its adoption of the single currency as a "serious mistake".
That mistake enabled successive Greek governments to go on a borrowing binge that resulted in today's unmanageable debt.
"The debt comes from the fact that Greek leaders always confused the notion of credit with revenue," said historian Nicolas Bloudanis.
"Joining the single currency allowed the country to borrow at low cost which let the political class reinforce its electoral base by recruiting state employees hand over fist," he added.
Moreover, Greece failed to use the ample European funds it received in the 1980s for increasing the productivity of its industry and economy, according to Savas Robolis at Panteion University in Athens.
"The viability of a million companies cannot depend on 3.7 million Greek households: they've got to export!" said the economics professor.
However, Robolis, who is close to Greek labour unions, believes a return to the drachma would relegate Greece to the ranks of "under-developed" countries.
The trend is already for Greek companies to move their manufacturing to EU countries outside the eurozone, such as Bulgaria, where tax rates and production costs are lower.
One of the rare voices, even among the far left, calling for Greece to abandon the euro is Costas Lapavitsas at the University of London's School of Oriental and African Studies.
The economist diagnoses the single currency as the cause of Greece's ills as it allowed countries at the centre of the monetary union, such as Germany, to enrich themselves at the expense of peripheral states.
Lapavitsas believes Greece has no choice but to default on its debt, abandon the euro, and impose controls to avoid a flight of capital.
To those who predict this would trigger an apocalypse with a collapse of the country's financial system, a huge devaluation and hyperinflation wiping out the savings of the populace, Lapavitsas points to the terrible social cost of the current austerity policies.
However, another left-leaning economist, Yannis Varoufakis at the University of Athens, believes the costs of leaving the euro are greater than staying in.
He believes the inevitable depreciation in the value of the drachma would lead to a "massive transfer of power" within the country from the poor whose savings and salaries would become worthless, to the rich who have managed to stash their wealth safely abroad.