Essay on Greece 's Economic Impact On Economy

1021 Words Nov 19th, 2016 5 Pages
With this intention, if a Grexit occurs it will be having a devastating impact on its economy because they will not receive debt forgiveness for what they owe to the rest of European governments. This will cause an increase in inflation, unemployment, and their asset prices will plummet. Millions of people will wake up knowing that their Greek euro deposits have transformed into devalued Drachma deposits. More important, Greece will never get a loan from the International Monetary Fund (IMF) or from the European Central Bank (ECB) creating a great burden on its citizens because taxes will increase. Truly, a Grexit will hurt its citizens the most than the 19 European countries who use the euro, because since in 2010, many international corporations have pulled their money from the country due to its debt. In the meantime, “…Greece’s economy is tiny, about 1.8 percent of the eurozone (the 19 countries using the euro) …This means that even if Greece’s economy sinks further--almost a certainty—the lost exports for other countries will be small.”[8] As a matter of fact, this was the same argument used during 2008 when America’s housing market began to implode and as we know today that caused a global recession. That being the case, Greece’s economy is smaller compared to its fellows EU countries and that is why people that think that if Greece exit from the euro, its government can have the ability to devalue its currency that would eventually make its exports more competitive.…

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