Why The Euro & The Drachma Are The Same

oped_300The current fashion is to say the new Drachma will lose 50% of its value when it is introduced

And that what Greece needs is an internal devaluation to improve competitiveness.

The reality is the Economy in Greece, has gone and is going through a huge internal devaluation with the Euro.

Euros are becoming much less abundant in Greece.

Less Euros means less money chasing products meaning lower prices and lower wages.

It is completely stupid to suggest that changing the pictures on the paper currency makes internal devaluation possible, while keeping the pictures the same, stops it from happening.

So why has Greece not benefited from the internal devaluation?

Why has this not made the Greek economy more competitive.

Because taxes have been increased and are increasing massively destroying any benefits that devaluation brings

It really is that simple.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s