Grexit the only viable option for Greece

Wellington (29 June 2015): After five years of unsuccessful attempts to “save” Greece and keep it in the Eurozone, the dramatic events of the past days show that this strategy has failed disastrously. The country’s best hope is for a fresh start outside the Eurozone says Dr Oliver Hartwich, Executive Director of The New Zealand Initiative.

Since the beginning of the crisis in 2010, Hartwich has been predicting that efforts to reform Greece while keeping it in the Eurozone were doomed.

Says Dr Hartwich: “It should have been obvious to EU leaders in 2010 that Greece did not only have a debt problem but a competitiveness issue. To solve it, Greece should have defaulted on its debt, exited the euro, introduced a new currency, let this currency devalue and reform its economy.”

As talks between Greece and its creditors have collapsed over the weekend, Hartwich notes that Greece might now do what it should have done all along: to leave the euro.

“Unfortunately, Greece’s euro exit comes after Europe’s taxpayers have spent hundreds of billions on bailout packages. None of this money has managed to get Greece’s economy onto a more sustainable footing. The European Union’s crisis management has been an unmitigated disaster.”

About Dr Oliver Hartwich: Dr Hartwich is a German-born economist and the Executive Director of The New Zealand Initiative. For the past five years, he has been writing a weekly column on European economics for Australian magazine Business Spectator (http://bit.ly/1Hp8YNY). In early 2010 he already predicted that the Greek bailout package would not work (http://bit.ly/1eTk43i ) and argued that European Monetary Union should be disbanded (http://bit.ly/1IEveQi).

Supplemental materials
See below: Video of Dr Oliver Hartwich discussing the Greek crisis and possible exit from the Eurozone.

About the New Zealand Initiative
The New Zealand Initiative is an evidence-based think tank and research institute, which is supported by a membership organisation that counts some of the country’s leading visionaries, business leaders and political thinkers among its ranks.

Our members are committed to developing policies to make New Zealand a better country for all its citizens. We believe all New Zealanders deserve a world-class education system, affordable housing, a healthy environment, sound public finances and a stable currency.

The New Zealand Initiative pursues this goal by participating in public life, and making a contribution to public discussions.

For more information visit www.nzinitiative.org.nz

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