The usage of the common currency, the Euro, was launched in 1998 with 11 of the 28 members in the Euro area adopting it. Greece joined in 2001. That was the start of a relationship that was always going to turn sour.
What is wrong with using the Euro?
We will just be blunt. The Euro was a pretty stupid idea. It consisted of having a group of different countries at different stages of economic development coming together under a common currency.
Having a common currency meant that the value of the currency you are holding will ultimately be decided by the various monetary policies adopted by the European Central Bank. Countries using the Euro as an official currency have no deciding power in the value of the currency that their country is using.
Simply put, if the Thai Baht is as strong as the Sterling Pound today, the Thai economy will suffer, since visiting Thailand for vacations and importing Thai products will become more expensive. From what we see, Greece is a country that needs a weaker currency to boost its economy. This will not be possible if it continues to use the Euro.
What is wrong with Greece?
Everything.
For starters, Greece’s unemployment rate for youth is above 50 percent. That is more than one in every two youths wanting a job but not being able to get one.
One of the perks of being part of the Euro is that Greeks should be able to just get up and move to another country to get a job. Though that sounds ideal, a quick look at the map in Europe with a pinch of common sense would give us the answer on why it is not so straightforward in reality.
Differences In Output
The differences in real gross domestic product in countries doing well in the Euro such as Germany and France compared to the others are far too great. It is like having a primary school student taking a university exam paper with the rest of the older students and being expected to do equally well.
It is time to end the love story
It is about time for Greece to break up with the Euro. As much as it might hurt, there is no point hanging on to an abusive relationship. Sometimes, you just need to remove the nail stuck at the sole of your shoe that is restraining you from moving on. A bad love story it may be, but Greece may come out better after it.
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