Greek Euro pull out 'immensely stupid'

27 Jun 2011, 8:45 am   -   Source: AFP
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Hardliners are calling for Greece to head back to the Drachma. (Reuters)

Hardliners are calling for Greece to head back to the Drachma. (Reuters)

Greece's Deputy Prime Minister Theodoros Pangalos has slammed as an "immense stupidity" suggestions that it would be better for his country to abandon the euro and return to the drachma.

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Greece's Deputy Prime Minister Theodoros Pangalos has slammed as an "immense stupidity" suggestions that it would be better for his country to abandon the euro and return to the drachma.
  
"Those who say this are extremely stupid. While they may be analysts, university professors or economists, saying that is an immense stupidity," Pangalos told daily Spanish newspaper El Mundo in an interview published Sunday.
  
"Returning to the drachma would mean that on the following day banks would be surrounded by terrified people trying to withdraw their money, the army would have to protect them with tanks because there would not be enough police," he noted.
  
"There would be riots everywhere, shops would be empty, some people would throw themselves out the window ... And it would also be a disaster for the entire European economy," the minister warned.
  
The Socialist government of Prime Minister George Papandreou has until Thursday to push austerity reforms worth an additional 28 billion euros through a divided parliament -- on top of sweeping cuts last year.
  
Greece has been told by its European peers that it cannot hope to continue receiving aid out of a 110-billion-euro ($155-billion) rescue package agreed with the EU and the IMF last year without reforms and privatisations.
  
Some economists have argued that Athens needs to restructure its debt and leave the euro to become economically competitive again.
  
The austerity measures the Greek parliament will vote on later this week are worth more than 28 billion euros ($40 billion) for the period 2011-2015.
  
Athens also intends to sell partial or full stakes in a host of state entities, aiming to raise 50 billion euros to cut the overall Greek debt of more than 350 billion euros.
  
But Papandreou's political opponents have pledged to oppose the plan and even some of his own lawmakers are grumbling about measures likely to alienate constituents.
  
Greece's ruling Socialists have a five-seat majority in the 300-seat parliament.
  
Pangalos said he expects parliament will pass the fresh austerity measures but he was not as confident that it will approve specific laws needed to enact fiscal reforms and privatisations of public companies.
  
"That's where we may have problems. I don't know whether some of our members of parliament will vote against it. It's possible," he said, adding he believed some lawmakers from the main opposition New Democracy party will vote in favour of the measures.
  
Greece's state treasury will run out of cash by mid-July unless the international creditors agree to unlock a scheduled 12-billion-euro tranche of the EU-IMF bailout.

Greece Reform , The Euro

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