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Last updateFri, 31 Oct 2014 6am

Could Eurozone Lose Greece?

By Brandon Moseley
Alabama Political Reporter 

In an interview with Newsmax, New York real estate magnate, Donald Trump said that Greece needs to leave the Eurozone.

Donald Trump said, “I think Greece and these other countries made a terrible mistake by giving up their currency because Greece wouldn’t have this problem if they had their own currency. It’s going to start disintegrating. Greece is going to get out, they’ll go back to their own currency, they will do what they’ve been doing and they will live happily ever after.”

New York University Economist, Nouriel Roubini agrees that European efforts to turn around the economic situation in Greece have failed and advocates that Greece exit the Euro in “an orderly" manner to save the Euro as a viable currency.  The question for Europe is how many nations go with them and how messy the crisis will get.

“It is clear that six EU states — Greece, Italy, Portugal, Spain, Ireland and Cyprus — are in trouble, with too much public debt and low economic growth," Roubini said to the Astana Economic Forum in Kazakhstan.  Dr. Roubini said that Greece will put preasure on Spain and other distressed economies to follow them out of the Eurozone.

In February, Senator Richard Shelby (R) from Alabama said, “To contain the crisis, European leaders have taken a series of unprecedented actions.  Most of these actions have required substantial backing by European taxpayers.  EU leaders established the European Financial Stability Facility, which can borrow more than $500 billion from member states to loan money to countries at riskThe IMF has also provided numerous loans to European countries.  It recently bolstered a special lending facility with the capacity to lend another $500 billion.  Because the United States is the single-largest contributor to the IMF, this means that U.S. taxpayers are on the hook for bailing out Europe.”

Trump said, “It (the Euro) hasn’t worked so good because Greece is turning up to be a disaster and Italy and Spain and lots of other countries are really pulling it down. Germany is doing well. They couldn’t take over the world militarily so they’re trying to take over the world economically.

Roubini has predicted that Greece will default on its debts and exit the Eurozone by the end of 2013.  “Postponing the exit after the June election with a new government committed to a variant of the same failed policies (recessionary austerity and structural reforms) will not restore growth and competitiveness. Greece is stuck in a vicious cycle of insolvency, lost competitiveness, external deficits, and ever-deepening depression."  Roubini said the Greek government can either force austerity on its populace for the next decade, and trap its economy in a downward spiral of joblessness and nonexistent growth or it can leave the Eurozone and start printing the Greek drachma again.  The currency devaluation will be painful, but it would make Greek products more competitive on the global market and put Greece in a position where its economy can grow again.

Trump does not see a Euro collapse as a problem for the U.S. “The Euro was created, that whole system was created in order to hurt the U.S. They wanted to gang up on the U.S. So you don’t have to feel so badly for them,” Mr. Trump said.

 

 

 

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