The unique solution for Greece, Spain, Portugal and Italy is to abandon the euro

These countries do not have other option if they want to keep their political systems and avoid a social shock. The International Monetary Fund, the European Central Bank and the European Community impose their decisions to the countries members of the Union. Some measures are reducing the pensions and the salaries of the public workers, diminishing the public spending in health and education, the privatization of the public enterprises and the public services and the increase of the public services tariffs.


It is obvious that the world population is beginning a rebellion. The protests worldwide are undoubted evidence. Occupy Wall Street ---which began on September 15 2011--- is already a big movement in the United States. In Spain ---where occurred the first manifestations of the indignant--- the protests are every day most; the same happen in Greece, Italy, Portugal, England and Iceland. For example, on October Saturday 15 2011, big protests also happened in Rome, Madrid, Barcelona, London, Berlin, Frankfurt, Brussels, Sidney, Japan and New Zeeland, among other places.

The protests are against the bankers and their unlimited desires of wealth; also against the indulgent attitude of the politicians and governments that give to the bankers trillions of dollars in bailout but deny basic resources to the majority of the population, by mean of the restriction of the public spending. All the money is for the bankers and the breadcrumbs, the remains for the rest of the people. That is the basic reason because the people are angry worldwide.

1. The solution

For overcoming the current crisis some European nations do not have other option than to abandon the euro and come back to their previous national currencies. The reason is very simple: because when those countries adopted the euro they resigned to its sovereign capacity to decide its monetary policy. In the past, Spain, Portugal, Greece and Italy were able to issue the amount of national currency that they required for their economies, with enough independence. But now no; now they must require the approval of the European Central Bank, the European Community and of the International Monetary Fund. That is the cause of the current crisis, because the first priority for those institutions is to recovery the loans given by the banks to those countries. Therefore they require strict measures of austerity to the nations; they want that the nations employ their resources ---in first instance--- to pay the debt acquired with the banks.

If Greece, Italy, Portugal and Spain abandon the euro and come back to their national currencies, their central banks will be able ---autonomously--- to issue the money for paying the salaries of the police, the teachers, the firefighters, the doctors, the nurses, etc; and will be able of to pay the national public financial commitments. They are industrial societies with an important autarkic capacity; they can survive with their own national resources because they are self-sufficient in agriculture, industry and services. Of course, those countries need to maintain and to increase its international commerce because through it they obtain their international mean of payment; and currently they have a part of that international commerce.

2. What would happen if Greece does not pay? A hypothetical scenario


If Greece abandons the euro the problem for Greece would be how to pay the external debt, in this case, the debt acquired in euro and/or dollars with the banks. An important question is: What would happen, really, in the true practice, if Greece does not pay its debt? Well, in this moment, because of the dependence of the euro it would be a chaos for the population because the government would be not able of paying the salaries to the people and to guarantee the movement of the economy; but if Greece comeback to its national currency the situation would be different, because the government would be able of issuing the necessary money to guarantee the economic movement. If Greece has an adequate level of internal supply of goods and services it might overcome the first stage of the situation and advancing to a best position. The same is applicable to the other countries.

If Greece abandon the euro, at the beginning, the financial international consequences for Greece would be hard; first of all, it would not get, for the moment none loan from the financial system; this mean that the country would not be able of to pay its external debt during a time. But this situation cannot be for much time, for a simple reason: when you are a big debtor of a bank you, in the practice, become in a partner of the bank; if you broke the bank also will broke. That is the big problem for the banks currently: their debtors are, in the practice, their partners.

The unique form that Greece pays its external debt is getting more international means of payment, this mean dollars or euro and for that is necessary that the country increase its participation in the international commerce. The other form is refinancing their debt at a convenient period. A combination of the two solutions might be possible. The international financing system knows that there is not other option than refinancing the Greek debt and giving fresh money because if they do not do this very soon the banks will broke.

3. A big show

All this situation is a big show of the bankers and some politicians for obtaining more benefits: a) more bailouts, b) more interest rates, and c) more benefits regarding the debt, because the sovereign papers that in this moment does not has none value will be sold to a good price in the future.

The sovereign debt never is paid completely; it is an eternal debt and this is the big business of the bankers; they simply change papers by other papers at a new term. For example, Greece will not pay its debt in euro or dollars; Greece only will change their expired papers for new papers to be collected supposedly at mid or long term. Meanwhile, the banks obtain the best part.

4. Conclusion

The international financial system will resolve the problem refinancing the debt of all the countries involved in the situation. The banks will impose their conditions; that is the objective of the current crisis that was provoked by the same banks for obtaining more and more money. That is all. But it is also very likely that some European countries like Greece, Portugal, Spain and Italy will reconsider the benefits and disadvantages of to stay in the euro sphere…The pressure of their populations perhaps will compel to the leaders of these countries to adopt a decision regarding the comeback to their previous national currencies. Germany and France, which obtain the most advantages from the euro, might keep the Union.