Martin Stuart Feldstein (George F. Baker Professor of Economics at Harvard and also president emeritus of the National Bureau of Economic Research (NBER) ) talked about the prospects of a Greek euro exit in an interview at Bloomberg.
He expressed the opinion that there is no specific formula that the countries can follow in order to solve their economic problems. Each country is different... and in the case of Greece and there is no solution but to exit the euro zone since the country's economy is in terrible situation that can not be fixed...
“Well, I think it would create chaos, it would create problems” says Mr. Feldstein and he adds,
“It would be better for Greece to be able to adopt a new currency, a drachma, allow the currency to fall as currencies did in East Asia and in Latin America; that would give a significant boost to growth in Greece as Greeks shift their spending to domestically produce goods and services.”
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In his article in "Financial Times Deutschland", the famous economist Nouriel Roubini, who had predicted the global recession of 2008 in 2006, says that either this year or the next, Greece will be forced to go bankrupt and leave the eurozone. This will happen even if a government will finally be formed after the elections of June.
Mr. Roubini says that Greece has fallen into a vicious cycle of bankruptcy, lack of competitiveness and continuous recession.
Germany and France want to force more tightly controls on Greece's financial resources on top of that they Merkel and Sarkozy warned political leaders in Greece to immediately concur with new austerity measures in order not to witness their country go bankrupt!!
In addition, only a few days after the German suggestions to set up a finance commissioner in Greece, Sarkozy and Merkel demanded Athens to set up a separate account from which bondholders will be paid directly and will ensure that billions of euros in bailout money go directly to servicing debt, and not other government spending priorities!
"I support the idea that the necessary interest payment for the debt service is put on an extra account to make sure that Greece will steadliy make this money available," Merkel said.