What happens if greece leaves eurozone

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Plus, such tremendous economic problems could spark political upheaval. However, many believe that in the long-term, reintroducing the drachma will allow Greece to reinvigorate its economy. The idea here is simple. Greece leaves the eurozone a Grexit and returns to the drachma. Greece declares one drachma is worth one euro. This would give Greece the opportunity to start afresh from outside the monetary union: it could restructure its economy without outside interference, and could be ready to re-enter the eurozone at a later point under new conditions — this time without false statistical pretenses or unrealistic expectations.

Such an option would allow the Greek government to make a new start in stimulating competition, fighting corruption, and otherwise building a basis for long-term growth.

This would not be easy, but it would no longer be a process that Greece finds humiliating and creditor countries find exasperating. The bottom line is that away from the EU , Greece will slip ever further into an economic abyss, characterized by rising income inequality and poverty. This is where most economists, who consider the upsides for Greece of a Grexit, have it wrong. Default and Grexit will only aggravate those structural failings, not only immediately, but also in the medium-term.

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