For the first time since the political changeover after the fall of the Junta, the elections of January 25, 2015 revealed a left government bringing to power the anti-austerity party of Alexis Tsipras, SYRIZA. Since then, there has been a rapidly unfolding situation regarding the economic policy that Syriza will bring into force. The question that comes back on track is the same as the question of the elections of 2012, will Greece leave the euro or not?
The difference this time lies in the fact that the rest of Europe is in a better economic shape than it was three years ago. Germany finally thinks
it can let Greece leave and Greece's budget is in relatively good shape that it finally
thinks it can leave too and get along with its own currency. Neither country wants that, but neither of them doesn't
want it so much that they would do anything to avoid it.
Greece needs Europe's money not only to balance its budget but to save its banks from a possible bankruptcy. If the austerity measures are not followed then the creditor countries will stop lending to Greek banks and the only option for the Greek people not to lose their money will be printing out a new currency, which would be undervalued regardless, and by that same account it would mean that Greece would leave the common currency. The new government does not believe that the European Central Bank will stop lending to Greek banks and will not force Greece to leave the euro simply because it would cause a similar risk for other European countries affected by the crisis, such as Spain and Italy.
Greek stocks fell 11 percent on Tuesday 27 January , another 9.2 percent the next day, before stabilizing up to 3.2 percent on 30 January. At the same time a three-year borrowing cost shot up to 16.9 percent. Worst of all, Greek banks collapsed between 30 and 45 percent in just the last week. It is necessary that the new Greek government makes decisions that will lead to a coherence between Greece and Europe. This way the new Prime Minister will win Europe's and ECB's trust and avoid situations as the one mentioned before, and finally prove that it is possible to find a middle ground that would save Greece from bankruptcy whilst at the same time getting Greece back in the global markets.
Greece leaving the Euro is a "solution" that will not benefit anyone, and it will definitely weaken the euro because the situation will escalate and other European countries like Spain and Italy will reasonably wonder what is the point of staying in the common currency when by leaving it and printing their own currency they can be saved.
Edited by: Dina Rokic
This article has been originally published in Greek on OneEurope Greece