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

Turkey's Erdogan: Women Not Equal to Men

Speaking at conference in Istanbul, President Erdogan says Islam has defined a position for women: motherhood More

Ahead of SAARC Summit, Subdued Expectations

Some regional analysts say distrust between Pakistani, Indian officials has slowed SAARC's progress over the year More

Philippines Leery of Development on Reef Reclamation in S. China Sea

Chinese land reclamation projects in area have been ongoing for years, but new satellite imagery reportedly shows China’s massive construction project 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.
Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Changei
X
November 24, 2014 10:09 PM
Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid