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.

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