Greece: End the Drama, Bring Back the Drachma

Have you ever known a married couple that had no business being together, but were completely unaware of it?

Maybe he's older or she's wealthier, or she's passive and he's a giant douche. Maybe they were in love once, but haven't felt that spark in a decade. Maybe they stayed together for the kids or because he had good health insurance. Maybe they were friends once, but now, for reasons no one can quite recall, they can't be in the same room without throwing drinks at each other. Well, folks, that's Greece and the Euro — a bad marriage that needs to end. Unfortunately, no one seems to want to help them file the paperwork. Like rich, meddling, overbearing parents, the rest of Europe is happy to throw more bad money at the problem, constantly churning over Greece's debt while avoiding the real problem: namely, that Greece has no business using the euro. None whatsoever. Greece should, as quickly as they can do so, leave the euro, default on their entire debt load, and reinstitute their old currency, the drachma. It's so obviously the solution that it's hard to imagine why anyone (other than those who hold debt that would now be worthless) would oppose such a move. The current plan is just flat out unworkable. The Europeans, led by Sarkozy and Merkel, want Greece to accept giant government cuts in exchange for loans — not money, not grants to get them out of debt, but more loans. These cuts would shrink the Greek economy, throw their recession into a depression, and reduce the standard of living in Greece by 50 percent. In exchange, they'd get loans and still, with the best case scenario, end up with debt that is 120 percent of GDP. In other words, they can trade away everything they have for the right to be exactly where they are right now...screwed and unable to pay their debts. What kind of deal is that? Greece should tell Europe to get lost, rip up their debts, and start over. Will this involve leaving the eurozone? Of course it will. Europe wouldn't let Greece just thumb their noses at billions in debt without some kind of retribution. That's why Greece should proactively switch back to their old currency, the drachma. Even without the debt, it hardly makes sense for Greece to be in on the euro. The unified currency provides few advantages, and denies Greece (and other nations) the opportunity to manage its own currency. It is this management of currency that lets nations at least TRY and stem off recessions, inflation, and other nasty byproducts of economies. Greece is left impotent to the recession, as it cannot do anything to its money supply. It has to live with the dictates of the EU. The EU, dominated by Germany, is more than happy to let Greece suffer because Germany isn't struggling. The sort of currency moves that would help Greece would harm Germany. In short, the euro doesn't have Greece's interests at heart. Why should they remain beholden to such an evil currency regime, when they have better options? Imagine Greece drops the euro today and goes back to the drachma. They'd be in for a world of hurt for a very, very short time. After that, their inherent advantages in having a lowered currency (the drachma would be worth far less than the euro) would make their export economy more viable. This would drive economic growth — real growth — which the Greeks could use to finance their government. Who gets hurt in that scenario? The euro leaders? Screw them. European banks? They bet that Greece would prosper, and loaned them money based on that bet. They were wrong. In capitalism, there are winners AND losers. These banks would be the losers. C'est la vie. Will there be ripples through the system? Maybe for the bankster class, such as Jon Corzine and his MF Global

firm, which literally bet the bank on high-profit, high-risk loans to Greece. Are we to doom the Greeks to a perpetuity of debt so that Jon Corzine can be guaranteed profit on his risky and stupid investment decisions? What's Greek for "hell, no"? The reality is that Greece needs to grow its way out of its mess. It appears that the greedy Europeans are not going to let Greece do that, and will instead insist that the Greeks cut when they should spend. Greece should tell them to get lost, ditch the euro, and let the other Europeans figure out how to fix their own mess. Their banks have siphoned off the profits of Greece for long enough. It's time to let those same banks take a few losses of their own.