News / Europe

Greek Bank Says Euro Exit Would Have Dramatic Effect

A man makes his way past a replica of a one drachma coin outside the Athens Town Hall, May 21, 2012.A man makes his way past a replica of a one drachma coin outside the Athens Town Hall, May 21, 2012.
x
A man makes his way past a replica of a one drachma coin outside the Athens Town Hall, May 21, 2012.
A man makes his way past a replica of a one drachma coin outside the Athens Town Hall, May 21, 2012.
VOA News
Greece's biggest bank says that if the country exits the euro currency bloc the effect on the nation's populace would be dramatic.

As the country heads to a new round of parliamentary elections in mid-June, the National Bank of Greece said Tuesday that a eurozone exit "would lead to a significant drop in living standards for Greek citizens."

The country's top lender said that Greeks would lose more than half their income and the value of the reinstated drachma currency would fall 65 percent. In addition, it predicted that the Greek jobless rate would jump from 21 to 34 percent while inflation skyrockets from 2 to 30 percent.

A coalition government of Greek socialists and conservatives agreed earlier this year to impose a sweeping austerity plan in exchange for billions of dollars in new rescue funds from its European neighbors and the International Monetary Fund. But the country's fractious political parties were unable to forge a new government after a splintered election earlier this month, leading to the new vote next month.

European leaders repeatedly have said they want Greece to remain in the 17-nation currency union. They also have said the Athens government must adhere to the austerity plan or it won't be handed any more rescue funds. Recent political surveys show the conservatives leading, with an anti-bailout party, the radical left Syriza party, trailing close behind.

One international finance expert, Andreas Hauskrecht of the Indiana University business school, said he sees Greece exiting the eurozone no matter how the election turns out.

"The likelihood is close to 100 percent, and it will happen in 2012 most likely. I wouldn't be surprised if it happens over the summer," said Hauskrecht.

He said that even if a new coalition government is formed that supports widespread wage and pension cuts and elimination of thousands of government jobs, it won't be enough to prevent a euro exit.

"The reasons are simple. Let's take the most optimistic way. They are able to form a government after the election June 17th. They are able to hold to their promises on the fiscal side and they still will default because the Greek economy is shrinking so quickly that the numbers that were the basis for the original plan to cut fiscal deficits are insufficient. So basically, they are in a vicious circle and it's only a question of time until they will have to default. The less optimistic say they cannot build a stable government, which is much more likely, and then they will default already in July 2012," said Hauskrecht.

Hauskrecht said that despite public pledges of support for Greece from other eurozone nations, Germany and more economically stable countries have grown weary of handing the Athens government more assistance.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

US Secret Service Head: White House Security Lapse 'Unacceptable'

Julia Pierson faces tough questions from lawmakers after a recent intrusion at the White House: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid