For the corrupt mass media a return to the Drachma equals destruction! For what reason they don’t say. It is served as an honour and explanations don’t exist. It is destruction, because it is ...destruction, pure an simple!
“Catastrophic for Greece was how it was characterised by a journalist Ev Mitilinaios the scenario of returning to the drachma” we read in the VIMA newspaper, without anywhere the argument being justified.
The same goes for Papariga (leader of the KKE) who actually doesn’t tire in warning us:”A return to the drachma under the current conditions would be catastrophic”!
The why and how must be held only for themselves.
Also the European specialists speak about destruction but we understand them eg. The president of the European central bank, Z. C. Trichet who supports that it will be: destructive for the Eurozone the return to the drachma. He doesn’t say this for Greece. We would agree with him, with the meaning that a departure of Greece from the Eurozone, would mean the end of an opportunist, stupid and criminal attempt to impose a united currency without a united economy and state. The responsibility belongs to the architects of the EU and the Eurozone, with the victim being Greece and the other countries of the European South.
There are others who state that due to the lack of a similar experience, the honest reply to the question as to ‘what will happen if we return to the drachma’ is simply, ‘I don’t know’!
We Have Experience
In reality there is experience not from one but many countries. Typically they aren’t the same, but essentially they don’t differ. Before we analyse things more, let us give a hypothetical preliminary example so one can be better understood:
Let us assume we had held onto the drachma but had latched it onto a hard currency, something which isn’t at all rare in international practice, eg the Euro. Whoever gave us one drachma we would give them back one euro. That is what happened in the beginning of the 1990’s with the Argentinian peso. So as to be confronted, they said, inflation, would be added to the dollar. One peso=one dollar and the opposite. This occurred with the bright sparks down at the IMF!
The results are well known.
The problem of the Argentinian economy was found in its currency? A big deceipt. A case of fetischism, which we come across only in the field of religion. Where the painter of holy images paints Mary and falls down on his feet in front of his piece of art and asks for himself to be saved! Thus man in society and commercial production has lot from his eyes his true relationships with his co-citizens and the division of labour among them, due to common survival and fantasizes that his life is determined not by the relationship with his co-workers but by other creations eg from a printed piece of paper, like the peso, which in and of itself has minimal value.
The diagnosis is wrong and the medicine chosen also. The patient wasn’t the typed piece of paper as is always to be believed by monetarist bourgeois economics but in the given situation the low level of competition of the Argentinian economy in the international arena. The medicine chosen for the peso to become as hard as the dollar, without having in the background the dynamism of the US economy, the only thing it could achieve was to destroy totally the competitiveness of the Argentinian economy. As exactly happened.
Argentinan had to travel backwards, its peoples had to suffer for a decade, to go bankrupt essentially for 75% of the debt to be written off, to disconnect the peso from the dollar and for it to be devalued, for the economy to start to develop once more. Naturally the problem wasn’t solved permanently as the Argentinian economy is part of the world economy and in conditions of world crisis they cannot but influence all the national economies. The abandonment of the policy of the hard currency in Argentina ended up being the correct and imposed choice.
With Greece before WW2 the same had occurred. Venizelos as well in the name of anti-inflationary targets, latched the drachma onto the British pound and later onto the dollar. As a result imports made money instead of exports, the deficits grew alongside the debts. Venizelos (no relation to current Economics Minister!) responded with an intensification of direct taxation, with sackings, cuts, autarchy and violence. In 1932 the country was forced to declare bankruptcy, taking the drachma off the link with the dollar and devaluation. Due to the policy that he followed the Liberal party imploded and Venizelos was forced to junk in his political career. From his ridiculous insistence on the hard drachma the political duet of Glyxbourg (ex-King) – Metaxas whilst the dictatorship that followed led the borrowers that Greece would continue to pay its debts.
Like Argentina in our days, Greece not only did not destroy itself, as the pre-war Cassandras predicted but with a weapon the national monetary policy and its refusal to continue to pay this odious debt, it added phenomenal rhythms of development taking on the third highest on the planet after Japan and the Soviet Union!
What is the difference of coming out of a link with whatever hard currency (or from the hard Euro – if that was the relationship) from the forced or chosen exit from the Eurozone? None whatsoever. Let them not say that there isn’t a historical parallel that we don’t have experience and we don’t know what the consequences are going to be for a return to our national currency.
I have referred to two examples but there are tens of others. Let those who sell catastrophism sell it it to those who have no clue. We will not allow Greece and the Greek nation to disappear so some can sell slavery to the Euro-atlantic bosses defending either which way the condemned Eurozone.
UNFOUNDED CATASTROPHIST SYLLOGISMS
In the press and the internet one finds syllogisms against the return of the drachma, but one doesn’t find many arguments. That isn’t a coincidence. I haven’t searched extensively but to the extent that I did, I found four paragraphs by Petros Dukas with which he tries to convince us that a return to the Drachma will be catastrophic. For all those that don’t realise relatively that he was Deputy Minister in two New Democracy govts, he studied economics and international relations in George Washington University, company management and finance economics at Columbia University and economics in New York University, to which he became a doctor of Economics. He also worked for Citibank in New York and became the general manager for the same bank in Greece.
P. Dukas supports that:
“The discussion and the threatening dilemma for a return to the drachma is unintelligible and self-destructive for our country.
Further down he posts the first attack we will be forced to accept as Greeks!
The points numbered are Dukas the answers are mine.
1) We will constitute acceptance that us Greeks have totally failed, that we are unable to compete and we are in the 3rd Division of Europe
Us Greeks were never asked or questioned if they wanted Greece to become a member of the EEC. Any who had a basic understanding knew that Greece was being thrown into a wolves den, as without trade protectionism it was impossible to compete with the west-European mega giants, when essentially , without the nations being asked, the rule of common market preference on the basis which the Union occurred, never functioned as this is how the uncontrolled centres of power in Brussels decided. Even worse there never were any European trade boundaries. With the GATT agreements and later the WTO ones the European market was transformed officially into a united world market, without the nations being asked. The entrance of Greece in 2001 into the Eurozone was the last nail in the coffin of the Greek economy. The fate of the Greek economy had been judged and that was known by all our politicians (amongst which is Dukas) unless of course we are to accept they are chosen simply by the level of dumbness.
2) The ‘New Drachma’ would unavoidably become immensely devalued in order to be able to aid the competitiveness of our exports. But never before has devaluation had anything more than medium term successes. It led to a cycle of inflation, a fear of a new devaluation, exit of capital and finally new devaluations.
Above the doctor of economics and deputy minister of economics (let us not forget that one) tells us that “we failed totally, that we are unable to become competitive and we are falling into the 3rd Division” But in paragraph 2 we accepted that the devalued drachma will “aid the competitiveness of exports” and consequently accepts that the overvalued for Greek measures euros will undermine our competitiveness. This doesn’t stop him arguing (totally illogically) that the return of the drachma is destruction! He must assume that he is talking to idiots…
FEAR MONGERING NONSENSE
Where does it come from that the devalued drachma equals inflation? Or that more inflation brings about more inflation and that is why we will have capital flight abroad? All of this isn’t but nonsense with which our esteemed Dr. is trying to frighten the people.
Inflation develops when we have few goods in the market in relation with demand hence we have an increase in prices. Or when the country is forced to print money from air as it has created obligations where its actual government coffers aren’t able to service.
The new drachma will be devalued in relation not to itself but from its original price 1Euro=340.75Drachma s which it was on 1st January 2001. Not because it is written in its DNA but because it is to the interest of the country. It must because Greece became an open border paradise and lost all its rights handed over to foreign centres of power with the Euro hanging on its neck and lost as a result 50% of of its competitiveness.
There will be repercussion which will occur on life, but they will only be positive. If the German Euro can’t be devalued for the Greek terrain, the quislings that rule us found the answer in devaluing our lives. How else are we going to feed the usurers and we save the eurozone which is one step away from death! They are taking the last cent which is circulating in the country having provoked a depression, mass unemployment, they cut and cut again salaries, pensions, they have unleashed a fierce tax chasing mechanism, the make incessant and constant increases in fuel, the prices of all utilities, the prices of all the basic basket of goods, they destroy the welfare state, all the services linked to people, health, education, everything.
The “New Drachma” which will replace the Euro will have the same form one euro = one new drachma which should become a paper note, with the same subdivisions and paper multipliers so as to avoid whatever speculation against the consumers. Whatever could be bought with one euro should be bought with one drachma. A wage of 800 Euros will become a wage of 800drachmas. The necessary devaluation is related to the relationship of the drachma with the euro and foreign currencies. In 2001 it was 1E=340drachma. Due to the economic meltdown which the country has suffered whose fault is due to the corrupt political personnel this relationship will change in defence of the drachma if we want to promote our exports and tourism. 1 Euro can become = 440.75drachmas. This devaluation in relation to foreign currencies is obviously going to influence to an extent the internal prices of the market, but not in a country where the govt will utilise all the possibilities internally and our relationships with abroad. We must add that a return to a drachma on its own does not satisfy for the country to stand on its feet. It must constitute the beginning of a new course, the independent and national domination of Greece, ready for new openings and open to fruitful cooperations with new peoples all over the planet, on the basis of mutual gain alone.
To proceed further: which exit of capital and fear of inflation is Dukas talking about? There are around $350 billion euros and dollars in the bank of Greece. There are the trading reserves of the country and not one has the right to touch them. If the state has the will it is in the position of defending them. Let us forget about capital flight. Neither Argentina in our days nor Greece in 1932 confronted such issues with bankruptcy and will not confront them now. The planet as a whole is facing the most complicated the most explosive crisis in its history and there are no areas which are now secure for any currency in any country. If capital flight occurs in Turkey which has its own currency the same will occur in Greece...
3) The massive debt in Euros should be paid in devalued drachmas. As a result our debt will increase to around 250% of GDP!
Will the doctor of economics drive us mad: Given the fact that the ‘massive debt’ won’t anyway be paid back (everyone understands that) not only is the debt transformed into drachmas but so does the GDP. Therefore the relationship of debt to GDP, remains constant, it doesn’t change because we change currency.
4) All the citizens with investments and deposits in our country would aim to avoid the losses incurred from a return to a Drachma and would take out quickly all the capital abroad with the result being the immediate collapse of the banking system and economic activity!
The respect and worth of a currency of a country is determined by the productivity of work but also by the quality of the productive goods. It improves or deteriorates from the development of these two factors. If they impose a currency on you like the Euro whose respectability and its price in the markets is very high as it is based on German competitiveness and quality, then it is truly illogical and an unnatural situation as it weakens serverely exports, as he accepts in the 2nd paragraph and supports imports. With the Euro Greece has a permanent date with bankruptcy. We need a 180degree turn and one of the first measures for the country on the road to development is a return to a cheap drachma. When that occurs we wont have capital flight or investments from the country. The New Democracy ‘doctor of economics’ deceives aims to influence the Greek people. With the cheap drachma capital will flood into the country. If the opposite occurred as is being alleged we wouldn’t see American and European capital emigrating to China with the cheap Renminbi but Chinese, Korean and Taiwanese to be emigrating to Western Europe and the USA!
As for the banks we say going bankrupt one after the other from the epidemic in the USA and Un Kingdom that occurred not because of capital flight abroad (so as to find safe ports, where truly?) but because we have a lack of liquidity, as their reserves are ‘toxic’ they are obligations by debtors who cannot pay. That is why every now and again states are making injections of liquidity in the banks so as to keep alive the money of its citizens. That occurs because it is in the nature of the market (which has been deliberately deified) cutting things down to size or increasing as it sees fit. The market is a creation of man and his creation, it cannot regulate the life of its creator. The creator man will tomorrow regulate the market and thus his life.