News / Europe

Greek Vote Could Lead to Eurozone Departure

Aides and security officers watch as Greek Prime Minister George Papandreou arrives at an urgent cabinet meeting in the Greek parliament in Athens, Greece, November 3, 2011.
Aides and security officers watch as Greek Prime Minister George Papandreou arrives at an urgent cabinet meeting in the Greek parliament in Athens, Greece, November 3, 2011.

Greek Prime Minister George Papandreou's call for his countrymen to vote on a European debt-relief plan has raised the possibility that Greece could become the first country to abandon Europe's common euro currency.

The language of a referendum question has not yet been set. But Greek and European officials already are saying the vote's significance can be simplified to a question of whether Greece wants to remain as one of the 17 countries that use the euro.

Surveys in Greece show that voters want to stay in the eurozone and keep the euro as its currency. Yet there is widespread anger at the continent-wide debt relief plan that demands that Greeks carry out austerity measures over the next several years in exchange for absolving the government of $140 billion of its debt.

Eurozone fallout

Quitting the eurozone could have widespread ramifications for both Greece and other European countries. It could lead to a run on Greek banks, a financially calamitous default on much or all of the government's nearly $500 billion in debts, and a return to use of a devalued drachma currency. International financial markets could stop buying the country's bonds, leaving it short of cash.

Banks in other countries could face huge immediate losses if Greece fails to repay its obligations to them. That, in turn, could lead to new international economic turmoil that Europe's leaders thought they had resolved with last week's agreement, and possibly spawn another worldwide recession.

The common euro currency took effect in 1999, but Greece has been one of its weakest financial links. The government has run up huge deficits that have forced its European neighbors and the International Monetary Fund to approve two Greek bailouts in the last year and a half.

Greek control

Advocates of an exit from the eurozone and a return to the drachma say it would give Greece more control of its affairs. One Greek economist, Stergios Skaperdas, now a U.S. university professor, said that staying in the eurozone will mean that "all important fiscal decisions will be made outside the country." He said the country is now subject to "private discussions" between German Chancellor Angela Merkel and French President Nicolas Sarkozy, the leaders of Europe's two strongest economies.

Skaperdas said that an involuntary default on the country's debt would prove more effective over time than a partial cut in its debt, like that called for in last week's agreement. He said the country could immediately stop paying interest on its loans, deal with short-term sacrifices and then control its destiny.

Some information for this report was provided by AP and AFP.

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

America's Most Exotic Presidential Pets

From alligators to bears, the White House has been home to some unusual presidential pets over the years More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs