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Politics & Law Series: Expert Comment

Three myths behind the case for Grexit

Professor Photis Lysandrou says Greece could face 'catastrophe' if it left the euro

by Ed Grover (Senior Communications Officer)

If Greece left the euro it would trigger a crisis that could “dwarf” current problems in the country, according to City University London academic Professor Photis Lysandrou.

The economist, of the City Political Economy Research Centre, says the nation's Syriza government is split, with its far left group backing 'Grexit'.

However, Professor Lysandrou claims returning to Greece's old currency, the drachma, would be "extremely dangerous" and could create a "disaster" that would hurt the most vulnerable citizens.

In a recent research paper, he outlines three "myths" which he says have been used by supporters of a euro exit to put forward their case amid the country's debt crisis.

Greek voters are now facing a referendum on whether to accept bailout conditions proposed by the Juncker Commission, the International Monetary Fund (IMF) and the European Central Bank (ECB).

Professor Lysandrou said: “If Greece leaves the eurozone, it would be a catastrophe for the country on every front – economic, political and social. It is likely to trigger a crisis that would dwarf anything that we are currently witnessing.

“All options facing Greece are bad for the country, but leaving the euro and restoring the drachma is by far the worst – it would spell disaster. As historical evidence suggests, this extremely dangerous, high-risk gamble could lead to vicious inflation and hurt the poorest in society – the very people the Syriza party seeks to protect.

“Leaving the euro would expose the nation to even harsher financial pressures and constraints and would actually reduce Greek autonomy, contrary to one of three myths believed by the left plank of Syriza.

“A second great misconception is that an exit would enhance international trade competitiveness. And the third, critical claim is that Grexit would enhance any meaningful solidarity between Greece’s progressive forces and those of other European countries.

“It is this wider, global perspective that must be taken – but one that is being ignored by the ideologically driven individuals within this split government. The last three decades show us that deeper, structural problems exist in the country’s almost totally import-dependent economy.”

Click here to read Professor Lysandrou's paper Three Myths Behind the Case for Grexit: A Destructive Analysis.

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