Fears are growing that the Greek economy is on the verge of total collapse, Economists are warning that unless the European central bank intervenes with more stringent support then Greece’s economy could fall in only a matter of weeks or even days.
President Karolos Papoulias has told party leaders that the nation’s banks had lost €700m in withdrawals on one day alone. Greek citizens are rushing to salvage their cash with the situation escalating to a sense of panic.
The political stalemate from the last Greek elections has set the pro-austerity parties on a direct collision course with the anti parties. Alexis Tsipras who is the front runner for next month’s rerun of the elections and leader of the Left-Wing Syriza has vowed to tear up the EU-IMF bailout deal. He called for German chancellor Angela Merkel to “stop playing poker with the lives of people.”
At the opposite end of the scale is Antonis Samaras the leader of the conservative New Democracy party. He has said that withdrawal from the EU-IMF sponsored loan deal keeping the Greek economy afloat would be tantamount to the destruction of the country, and attacked Syriza for its “lack of preparedness and inability” to govern.
Samaras spelt out “the nightmare” that would ensue if Greece gave up the euro.
Reverting to the drachma would mean wages being “cut in half, deposits being cut in half” and property prices being devalued. The price of imports would skyrocket particularly for food and gas.
“This is the nightmare that those who speak of a unilateral condemnation of the bailout will bring us.”
Meanwhile the center for economics and business research is predicting that a Greek exit from the Euro could cost the global economy $1,000,000,000,000(a trillion).
Its chief executive Douglas McWilliams said: “I told the Greek government two years ago in Athens that they had no option but to default and devalue. At the time this was an unusual view and I was attacked on prime time Greek TV by the leader of the Communist party as ‘irresponsible’ To be frank that didn’t worry me much – if the Communists think you are irresponsible you must be getting something right…Because of the failure to address the problems caused by the euro early enough these problems are now worse and the options have been reduced.”
Political infighting is the last thing Greece needs. More than ever Greece and Europe needs a leader to step up to the plate and try to salvage the situation. Voters across the continent are tired of politicians only caring about their own careers and scoring cheap political points. It remains to be seen whether the new French president Francois Hollande will be up to the task.
UK Prime Minister David Cameron said today; “We are living in perilous economic times. Turn on the TV news and you see the return of a crisis that never really went away. Greece is on the brink; the survival of the Euro in question. Faced with this, I have a clear task: to keep Britain safe. Not to take the easy course – but the right course. Not to dodge responsibility for dealing with a debt crisis – but to lead our country through this to better times.”
The euro has slipped to a new four-month low against the US dollar, as fears over the Eurozone crisis swept through the foreign exchange markets again. The pound has also weakened dropping below the 1.60 level as fears of a Greek contagion increase.
The Pound to Euro exchange rate is currently trading at 1.244
The Pound to US Dollar exchange rate is currently trading at 1.581
The Euro to US Dollar exchange rate is currently trading at 1.271
The Euro to Pound exchange rate is currently trading at 0.803
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