Greece's economic collapse: maybe we need to return to the drachma

Russian President Vladimir Putin has good reason to raise the issue of Greece returning to the drachma (the national currency), since he has reason to believe that the country is facing an economic collapse that will end in the next 25 years.

In particular, Russian President Vladimir Putin, speaking at the Valdai Club (“Davos” BRICS+ and a key analytical center of the Russian economy) stated that “Greece should at some point consider returning to the drachma, or at least to a national currency, in order to be able to develop and not leave these efforts on the shoulders of the people.”

The reason he made this statement is because he knows about the deplorable economic situationwhich Greece finds itself in and the slow path to collapse it has been on since 2009.

However, in fact, this path to disaster began earlier. Actually Greece economically “died” with entry into the euro area in 2002. What happened with the memorandums in 2010 became only “the stench of decay”. In fact, considering that only eight years have passed, the disaster of joining the euro happened in a very short time.

Why did the euro destroy Greece? It cannot be otherwise that a “light” economy, which had no export power, whose main products were “low-tech”, functioned with a “hard” currency that suits the Germans and the Swiss. Primarily products that Greece had in abundance, such as agricultural and livestock productsimmediately became expensive for export! And they had to compete with other countries that had their own currency and their goods became cheaper.

An economic catastrophe of enormous proportions occurred, but no one understood what was happening until the moment it began. By the time this was realized in 2010, it was already too late.

However, the country had a great opportunity to avoid this big mistake, but the political system chose not to take advantage of it. We are talking about the proposal of the now deceased former German Finance Minister under the Merkel government, Wolfgang Schäuble, who proposed to Greece leave the eurozonehaving received a “dowry” of 50 billion euros to meet its needs until the transition of its economy to the national currency normalizes.

But the political system then feared its own collapse due to the prevailing atmosphere that leaving the euro would be an absolute disaster for Greece and therefore chose to cede the country’s sovereignty to creditors for more than 100 years! That is, give income from state property to foreigners!

This step in itself is unprecedented, and no other country on the planet would ever do this. And all this in order to keep Greece in the euro!

If it returned to the national currency, the country would have opportunity meet domestic needs by printing money and external needs with the abundant foreign exchange that is and will be generated from tourism and shipping (sectors that also bring many untapped resources to the country).

The normalization period when switching to a national currency would be no more than one year, since that is how long it will take to pay income from tourism and shipping.

It should also be added that those who have money abroad will bring it into the country because at they're just there will be too much purchasing power and they will start acquiring assets.

Inflation will occur, but this is not so bad, since it will solve the problem of the internal market. After all, an example would be Bulgaria, which kept the lev because it knew it couldn't enter the eurozone without what happened to Greece.

Turkey has its own currency and high inflation, and for years we were told it would collapse, but instead it has built its own large defense industry with serious export activity, and its tourism is booming.

The US debt is $35 trillion, but they can handle it, firstly, because it is in their currency, and secondly, because the dollar is the world's reserve currency. At least until now and until dedollarization will not progress to an even greater stage, they are not in immediate danger. Therefore, there are serious advantages in having your own national currency and not participating in a supranational monetary unit.

The demand for the return of the national currency in Greece is shared by all medium-sized exporters. Only then can they prosper. Some even said that we should adopt the dollar as our currency! Greece does not need a new “hard” currency, but its own.

To understand the economic damage the introduction of the euro caused to the countryMichalis Sallas, former Chairman of the Board of Piraeus and Chairman of the Board of Lyktos, during his speech at the presentation of the book by Panagiotis Roumeliotis “Fragmentation of the World” said: “Greece lost 600 billion euros between 2008 and 2022, while the green transition will require 456 billion by 2050 (another painful story)”!

In fact, his assessment is still quite modest. The money lost by Greece exceeds 1 trillion, since what Michalis Sallas mentionedrefers to the loans and interest payments the country will have to pay, not the drop in GDP it has experienced. It should also be noted that if the country were to leave the euro, it would not have to take out these ruinous loans.

If we follow the current course, then by 2050 the country will be economically destroyed, since it does not produce, will not produce exportable goods in sufficient volumes. In addition, she has a serious demographic problemwhich is also caused by the economic downturn.

Due to the desperate economic situation, all young people who were still born in the country prefer to go abroadto live with dignity. Because the problem in Greece is that very few people can live with dignity, and this has nothing to do with their qualifications.

However, V. Putin has his own reasons why he started talking about returning Greece to the drachma. From a geopolitical point of view, neither Russia nor the US would want this to happen, because then Greece will cease to be a significant factor of influence in the Aegean Sea and the Eastern Mediterranean, which means that Türkiye will remain the only power in the region.

Türkiye, which has already become the strongest regional power, and the Russians and Americans will have to deal exclusively with it. In particular, with Greece, the United States has learned to get what it wants with relative ease and without a quid pro quo (“quid pro quo”). This will not work with Turkey.

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