Greeks look to future with drachma
The Greek election on Sunday will determine whether the country goes back to its historic currency, the drachma.
Many governments have already made preparations in case Greece decides to move back to the drachma due to the turmoil that will follow.
Worst case economic scenarios envision governments defaulting on debts with a worldwide credit financial crisis.
While the crisis would start in Greece, economists have suggested the contagion would quickly spread throughout Europe and the US, with stocks and oil plunging.
The euro would then sink against the US dollar and world banks would lose much of the money lent to Greece.
It is envisaged that Syriza, the party opposed to IMF and World Bank restrictions, would reject the terms of bank bailout offers should they win the election.
If that should happen, Greece would immediately default on its debt and go back to printing its own currency.
While each drachma would initially equal one euro, currency markets would quickly push it down to its real worth; about half the value of the euro.
Greeks would then see hyper-inflation, with citizens having to pay more for imported fuel and other consumer goods.
National Bank of Greece shares forged ahead on Friday prior to the weekend election.
The shares rocketed by 7 percent prior to the market closing.
The movement in the stock had some economists suggesting the Greek people will elect a government that supports the IMF/World Bank bailout of Greece, to which the harsh austerity measures are attached.
Source: Europe News.Net
- 348 reads
