So a judge is not the prime minister of Greece. Here is an article explaining the situation in more detail.
Here is an excerpt from article which highlights the “inevitable” outcome to a Greek government default
The leftists argue they can tear up the bailout and keep the euro, but European leaders say if Greece fails to meet promises to them, lenders will pull the plug on financing, driving Athens to bankruptcy and a swift exit from the EU single currency.
Now I like Athens News, after all I get most of my material from them but this type of shallow journalism is typical of them.
They state a Greek Euro exit as a fact if the government defaults which is simply not the case.
This is what needs to happen for Greece to stay in the Euro.
Immediately Greece will need to stop sending money out of the country. ie the Greek trade deficit will need to be balanced overnight.
How can this happen?
Step 1. There has to be a short period 7-14 days where the borders are closed to anything but essential products and supplies.
Step 2. Immediately after the default taxes need to be slashed. All central government taxation needs to be eliminated. This will mean no property taxes, no income taxes, no inheritance taxes, no VAT etc etc.
Step 3. Given step 2 all central government services (except those people are willing to pay for voluntarily) will cease to operate. (Law and order is financed by local government).
All central government regulation enforcement will be handed over to the legal system and financed by the private parties involved.
What will these 3 step achieve?
1. Huge price drops on all goods & services. With no central government taxes Greeks can expect the price of products to reduce by at least 23% and in reality closer to 40% given the massively reduced labour costs and related business taxes.
In the case of fuel prices can expect to drop by over 60%.
This drop in prices will allow the remaining money in Greece to go much further buying the country time for the new measures to take effect.
2. These new conditions will make Greece irresistible to companies in all industries and most importantly manufacturing and export driven businesses. And not forgetting the most obvious industry, tourism. With consumer prices reduced by over 30%, Greek will be even more irresistible to people than it is now.
These companies will not set up in Greece overnight, but the companies that are currently operating in Greece will see their businesses become more competitive than those in other countries around the world, leading to an almost overnight export boom. This boom will see massive inflows in foreign currency reserves eliminating any need for the government to print its own currency.
Let me repeat that. By eliminating central government taxes Greece will no longer need to print its own currency, so no need for the Drachma. Instead of the Greek central bank printing the currency and devaluing people’s savings, the inflows of money from foreign countries will be more than enough to keep the country liquid without resorting to borrowing and money printing.
Okay, this is what should and need to happen if the Greek government were to default. But lets look at why these measures will never be implemented.
1. Government Debt. If the Greek government were to balance the Greek trade deficit there would be no reason for the government to borrow in the name of the people. This lack of government debt will massively reduce the revenues private banks will be receiving from Greek taxpayers in the form of interests payments.
No debt, no interest payment, no money for banks.
It is in the interest of the private central banks to not have countries self sufficient and sustainable. Private central banks, by creating the conditions where governments need to borrow, they guarantee themselves huge interest payments for perpetuity.
2. Europe. The EU will simply not allow Greece to implement these measures. Greece will become massively more attractive to businesses than any other country in Europe leading to a boom in Greece at the expense of other European countries.
Greece will have to abandon so may EU regulations and laws that it will be unrealistic to expect the EU to allow it to happen.
In reality a Greek government default will probably lead to a Euro exit in one way or another but the mainstream media only give the obvious reason ie Greece will have to print its own money otherwise it will not have any currency. (And I think I give more credit than is due because I see no explanation whatsoever coming from the media)
The other option which the mainstream media does not touch on, is the fact that Greece could easily do without money printing and the devaluation of its currency by simply balancing its trade deficit.
In the Euro or out of the Euro, in the EU or out of the EU, these things are irrelevant.
Let me repeat. It is irrelevant to the Greek economy if Greece is in the Euro or out of the Euro, in the EU or out of the EU. Greece’s fundamental problems stem from the fact that the country sends 20 billion Euro out of the country every year that is not replaced with exports. The only way Greece can have a functioning economy with this trade deficit is with government borrowing which means money printing which means Greece is dependant on the monopolistic private central banking system.
Until this fundamental problem of their being a monopoly on the control of the currency is addressed, Greece will always be controlled by the Greek central bank and the central banking system at large.
Until this monopolistic system is liberalised, governments will be able to borrow in the name of its citizens which leads to the enslavement of its people through the taxation of their saving through devaluation and the servicing of the unnecessary debt through personal taxation.
And this leads me on to how this situation will pan out.
If the Greek government defaults, a Euro exit will probably happen soon after. That is where the media leaves it but let me just explain again why.
The measures Greece will need to implement to balance its economy are simply not compatible with the EU. Greece will need to implement freedom and true capitalism, the EU is a socialist entity, because of this conflict Greece will not be able to do what it needs to do and remain in the Euro and the EU.
If an EU and Euro exit is what is required than I think it is a very small price to pay given the simply massive benefits to Greece, Greeks and the Greek economy through the balancing of its trade deficit and the creating of a sustainable and strong economy.
However there is no political will in Greece that I see to rock the boat with Europe which is why Greece will end up with the worst of all worlds.
Greece will exit the Euro but Greece will remain in the EU. This will mean that the hands of Greece will be completely tied by the EU bureaucracy making Greece unable to carry out the reforms it needs to make the country a success.
The only option Greece will have in this scenario is for it to return to a Drachma with the private Greek central bank printing the money to constantly devalue the savings of Greeks and increasing the cost of living for Greek through price inflation.
To summarise, there is no way Greece will be allowed to carry out the reforms it needs to when Greece is part of the EU.
Greece will only be allowed to take back its currency and to return to the system of price inflation and currency devaluation. The return of the Drachma while remaining in the EU landscape will negate any reason for the Greek government to address the fundamental problem with the economy which is the trade deficit.
Provopoulos has already outlined a prediction of what would happen to Greece should the country return to the Drachma. As the days pass it is looking more and more like an admission of the Greek central banks strategy.