EURO HUMILIATION: Germany
‘freaked out’ as Greece 'could ditch EU currency for US DOLLAR'
GREECE could be
poised to humiliate Brussels by ditching the euro and instead choosing to be
tied to the US dollar, Donald Trump’s reported pick as EU ambassador has
sensationally claimed.
Professor Ted
Malloch revealed that senior Greek economists have enquired about the
possibility of adopting the greenback if the country crashes out of the single
currency.
He asserted that
Athens is so desperate it is prepared to tie itself to the dollar on the same
terms as the likes of Puerto Rico if it means being able to quit the eurozone.
And Prof Malloch
said German leaders including Angela Merkel were “freaked out” at the
humiliating possibility of losing Greece to a rival currency, which would be a
devastating blow to the EU project.
Tying Greece
temporarily to the US dollar would be one way for the authorities in Athens to
ensure that its currency does not completely tank if it leaves the eurozone, as
would likely occur with a reissued drachma.Y
However critics may
argue the country would be jumping out of the frying pan and into the fire, as
it would simply be trading one currency it has no control over for
another.
In an explosive interview with a Greek broadcaster Prof Malloch said it
would be the best thing for the the country’s people if it quits the eurozone,
adding that the current situation is “simply unsustainable”.
He told Skai TV: “I
know some Greek economists who have even gone to leading think tanks in the US
to discuss this topic and the question of dollarisation.
“Such a topic of
course freaks out the Germans because they really don’t want to hear such
ideas.”
On the ongoing debt
crisis, he added: “Greece might have to sever ties and do Grexit and exit the
euro. It needs debt restructuring, it really needs debt relief, and I know
people in Europe don’t want to hear that.
“They need to
reduce the debt overhanging and that means frankly something that people in
Germany and elsewhere have not been able to accept, it means a haircut to the
lenders and to the banks in Germany and probably, at least in my perspective, a
return to the drachma. "So the problem
then is who will manage that transition, and how, to avoid all the chaos and
all the instability.”
World leaders are
locked in frantic talks over Greece’s finances yet again this month, with the
country about to run out of cash unless a fresh bailout package can be
agreed.
Previous agreements
have required Greece to sign up to devastating austerity measures which have
gutted its economy, and have been heavily propped up with German cash.t in
But Greece’s debt
has now got so huge, and the sense of weariness is so great on both sides of
the talks, that there are now fears a deal will not be reached, causing the
country to crash out of the euro.
Elsewhere Prof
Malloch also expressed his opinion that the new US President will want to seal
a trade deal with Britain before the rest of the European Union.
He described
negotiations with Brussels on the Transatlantic Trade and Investment
Partnership (TTIP) as “literally dead” under Mr Trump’s administration.
And in an interview
with Inside US Trade he said a free trade pact with the United Kingdom could be
signed, sealed and delivered within a year of negotiations beginning because
the countries have so much common ground.
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