Well when you wake up on this weekend after hangover the history could have changed. A small country Greece has already put companies around the world on high alert on the occasion of Greek vote. This would be so fast that election will be held on sunday and by 11pm you will have the winner.
The major 3 parties and their view if the come to the power :
New Democracy – Antonis Samaras said June 13 the parties “must find common ground” to avoid a third election or a euro exit. His conditions for cooperation are “staying in Europe and the need to renegotiate the bailout to cater for growth.”
Syriza – Alexis Tsipras said June 13 that European officials won’t push Greece out of the euro even if he fulfills his pledge to cancel austerity measures.
Pasok – Evangelos Venizelos has sent rival party leaders a framework for a coalition to avoid paralysis and said on June 12 a Greek government must attend the European Union summit at the end of the month.
I do not know who will come to the power or will be a collation but it would be scary to say that Greece’s departure from the euro will not be as much of a shock as the collapse of Lehman Brothers in 2008, which provoked a global financial crisis. Although market may have discounted that but the repercussions are not known.
Could you imagine the situation of the Greeks as are gripped by uncertainty and taking measures large and small to prepare for what may come next. ‘I don’t know whom to trust or what to believe,’ said Ilias Daskalopoulos, a 28-year-old unemployed writer who earlier this year went to the bank and withdrew his entire life savings–a few thousand euros that he now keeps stashed in a secret hiding spot…Other Greeks are transferring money out of the country, hiring security guards, stocking up on groceries and keeping their cars’ gas tanks full–measures of the anxiety many feel as the country’s economy collapses and government institutions struggle to cope. Unemployment passed 22% in the first three months of the year, and crime rates are climbing…Bankers say that in recent days, there has been a surge in withdrawals from Greek banks.” Source : The Wall Street Journal.
If Grexit occurs they will be screwed big time :
- It will effectively wipe out the savings of much of the middle-class.
- If they go back to the drachma – and that drachma is going to depreciate as it almost certainly will against the euro – they also run the risk of inflation.
- Typically when they see a country leave a currency union and depreciate their currency, part of the benefit is that it makes their export sector more competitive. Greece has a very small, and at this point uncompetitive export sector. So, they won’t get that benefit.”
- Greece still runs a very large primary deficit. In other words, the government cannot pay their bills even before you figure in the costs of interest payments. If Greece leave the euro, the European Union will no longer be subsidizing that deficit, which means the Greek government is going to have to cut back on its spending dramatically and pose even more pain on the Greek population.