The British economists have suggested the Greek government to rescue its economy abandon the euro and declared bankruptcy on its debt of 300 billion euros, says the Times. London-based Centre for Economics and Business Research (CEBR) warned the Greek ministers that will be able to escape the debt trap of the country, unless it devalued its currency to encourage exports. The only way this can happen is to return to Greece its own currency – the coin. Greek politicians rejected the idea of leaving the euro area would lead to disintegration of the single currency. “Leaving the euro would mean that the new currency will be cheaper at least by 15% and as the national debt is measured in euros, it would automatically increase the level of debt of 120% of GDP to 140% of GDP,” said Doug Makuilyams, executive director of the CEBR, during talks in Athens yesterday. “So part of the idea of leaving the euro is Greece unilaterally convert debt into the new local currency. Separation of Greece to the euro would be a disaster for Germany and French banks, which Greece owes billions of euros. However Makuilyams sets this development as “practically inevitable” and added that other eurozone countries could follow suit in Greece.
“The only questions that remain are when and how many countries will be forced to do so,” said Makuilyams. Spain will probably be forced to follow Greece and Portugal and Italy, although Italian debt situation is not so serious. “Could this be the last week the common European currency? Very likely, “said director of CEBR.