Viewpoints on Greece Exiting the Euro

Greek politicians are struggling to form a new government.

There are powerful factions that do not want the austerity measures imposed on Greece by its international lenders.

But unless Greece can satisfy the demands of the European Union and the IMF, then they will cut off Greece’s last remaining lines of credit.

Without that, Greece will not be able to pay its bills and could drop out of the euro altogether.

Below are the views of several experts on what would happen if Greece were to leave the euro.

Carsten Brzeski, senior economist, ING Belgium

Chaos. Greek banks would go bust. Greek companies would go bust. Unemployment would go up. The new drachma loses lots of value.

Food and energy prices go through the roof. It would be an explosive cocktail.

The turmoil would weigh on growth. The outlook for the eurozone would worsen.

Michael Arghyrou, senior economics lecturer, Cardiff Business School

The drachma would be devalued by at least 50%, causing inflation.

Interest rates will have to double and all mortgages, business loans and other borrowing will become much more expensive.

There will be no credit for Greek banks or the Greek state.

That could mean a shortage of basic commodities, like oil or medicine or even foodstuffs.

A lot of Greek firms rely on foreign suppliers, who may cut off Greek customers. Greek companies could be driven out of business.

Greece will lose its only reference point of stability, which was its euro status.

The country would end up in a volatile period. There would be institutional weakness.

The worst case scenario would be a social and economic breakdown, perhaps even leading to a totalitarian regime.

Sony Kapoor, managing director of the Re-Define think tank

I think that either the Greeks or European policy makers talking about an exit in a casual blase way are being highly, highly irresponsible.

Total cost versus the total benefit remains overwhelmingly negative, both for the eurozone and Greece.

In one shot, a Greek exit could undo a large part of good work in Ireland and Portugal.

If you are a Portuguese saver with money in the bank, even if there is a small likelihood of losing that money, it would make perfect sense to move euro deposits while you can to a safer haven, like the Netherlands and Germany.

There would be a significant deposit flight in peripheral countries.

It would immediately weigh on investment in the real economy, because corporations would be very reluctant to invest anything at all.

Megan Greene, director of European economics at Roubini Global Economics

You would see cascading bank defaults in Greece and everybody would take money out of Portuguese and Spanish banks.

A big part could be plugged by the European Central Bank (ECB) through a liquidity operation that would backstop the banks.

The ECB has already done that several times and it would step up to the plate again.

But that would not stem the political contagion or unrest. We have seen four elections in two weeks. In Greece, France, Italy and Germany, electorates have voted against austerity at home.

However, Greece is a small country and the rest of the eurozone has been making provision for this for a long time now.

The eurozone could survive a Greek exit. Depending on the choreography, the exit could be better for everyone involved if managed in a co-ordinated orderly way.

But if it were done by a unilateral default, an exit would be a worse option for Greece.

Jeremy Stretch, head of forex research, CIBC

In the currency market, we are already seeing money fleeing to safe havens.

The alternatives are few and far between for those who want to stand aside from the euro.

The dollar is performing relatively well. The dollar index – the dollar against a basket of other major currencies – is at the highest level in two months.

A new drachma would not be the most widely trading currency in the world and would probably drop in value by 50%.

Jan Randolph, head of sovereign risk, IHS Global Insight

What everyone is missing is a third possibility.

If credit is withdrawn by the EU and IMF, then Greece becomes a cash economy. It means the government can only pay what it collects.

The government starts shutting down, 10-15% of state employees don’t get paid and unemployment surges from 20% to 30%.

But Greece can still use the euro.

It would be difficult for the ECB to keep banks afloat. The Greek banking sector would collapse as well.

That would cause more unemployment, as credit for companies would dry up.

What happens next is a political question.

European nations would probably not accept another Western European country descending into chaos and collapse.

The EU and IMF would probably negotiate some kind of aid. But Greece could continue with the euro.

Useful links for Elections 2012

Useful links for elections 06May2012:

  • Greek Elections 2012: A Practical Guide – published in Wall Street Journal (WSJ)
  • Real-Time Vote Results from Υπουργείο Εσωτερικών
  • WebTV Live – ERT

  • News Links 02May2012

  • Greece Rises From The Ashes, No Longer In Default S&P Says
    Greece has emerged from default, according to credit rating agency Standard & Poor’s….
    Forbes – Full Story

  • Greek debt raised out of default by Standard and Poor’s
    S&P upgraded the crisis-hit nation to “CCC” from “selective default” after the country completed the biggest debt restructuring in history earlier this year…
    BBC News – Full Story

  • Greece wins four of 28 Europa Nostra awards given in 2012

      Greece wins four of 28 Europa Nostra awards given in 2012

    Greece has won four of the 28 Europa Nostra Prizes for Cultural Heritage in 2012, the European Commission announced on Tuesday, 20Mar2012. The 28 winners were selected from among 226 submitted projects from 31 countries. The European Union Prize for Cultural Heritage – Europa NOSTRA Awards highlight some of Europe’s best achievements in heritage care, and showcase remarkable efforts made in raising awareness about our cultural heritage.

    EUROPEAN UNION PRIZE FOR CULTURAL HERITAGE / EUROPA NOSTRA AWARDS 2012

    Three of the prizes won by Greece were in the Conservation category and went to the NTUA School of Architecture for the Averof Building, the Windmills of the Monastery of St. John the Theologian on the island of Patmos and the Ancient Citadel of St. Andrew on the island of Sifnos.

    The fourth prize was in the category ‘Dedicated Service’ and went to the Piraeus Bank Group Cultural Foundation in Athens, Greece.
    See below for details:

    The prizes will be presented on June 1 during a ceremony at the Jeronimos Monastery in Lisbon, by Europa Nostra President Placido Domingo and European Commission officials.

    See also Eropean Commission – Culture

    Political and financial leaders

    It is now clear to all of us that the current situation in Greece is tied to the state of things in Europe and the larger world. I am not sure whether purely economic arguments can be used as the only compass to get a sense of preferred direction for our country. My own gut feeling is that the fate of Greece is linked to wider trends that remain unacknowledged, at least publicly, by our political and financial leaders.

    Here are my thoughts on this. We have been living in the so-called modern world for several hundred years now. The building blocks in this modern world have been: (1)Science and the scientific method for understanding our physical and social world, (2) Commodification and mass production of goods and services to meet our material needs, (3) Democratic forms of government to manage political systems on the basis of consensus and the middle ground, and to spread the wealth to as many people as possible.
    Along with these 3 building blocks, religion has continued to play a role in our social sphere.

    A delicate balance among science, commodification, and democracy was at the heart of the modern social contract in the developed world. All three building blocks worked more or less synergistically. This social contract is now broken. Commodification has become the dominant building block in our world. The outcomes of this domination are hard to miss or ignore:
    small financial elites which have amassed obscene amounts of wealth, great poverty amidst mountains of material goods, an obsession with economic growth at the expense of our planet which is the only home we have, the takeover of our political systems by the interests of financial elites, and the progressive delegation of science into the laboratories of industries and corporations. Not a pretty picture.

    Greece is not alone in its difficulties. Other countries and peoples around the world are experiencing the perverse effects of unrestrained commodification. In my view, we need to engage in a dialogue with our European partners and the rest of the world because we have common interests with all of humanity. Political and financial leaders will not respond to silence. Pressure, unrelenting and continuous pressure, is what gets attention and results. We are not commodities to be used and discarded. We are not just “taxpayers”. We are human beings and citizens. I join my voice with the voices of all my fellow Greeks, Europeans, North Americans, and people everywhere. This is not an issue of German against Greek, it is not right against left. Divisiveness and isolation is a trap. Enough is enough. We want a more just, dignified, and united world.

    Anastassios Carayannis, PhD
    Professor, Department of Applied Human Sciences
    Concordia University
    Montreal, Canada

    *** Enough *** of Politics?

    5,578 Hellenic Professors and PhDs.
    My question is:
    Don’t you think that 5,578 bright minds could discuss something else of substance and be more productive?

    Visit your blog and spend 5 mins of your time to read this:
    http://www.greece.org/blogs/scholars/?page_id=1061
    Click the “Users” button to see your colleagues.
    Register yourself if you have not done so.
    Edit your profile information and add a short bio about yourself.
    Take a look at the projects.
    Participate in Blue Skies.
    Offer some ideas.
    Let’s work to do something productive.

    We can do better than discussing politics all the time and blaming our culture and politicians for the condition of our beloved country.

    Thank you,

    Thanos Voudouris
    HEC Director

    News Links 04Jun2011

  • The European Commission, the European Central Bank and the International Monetary Fund, ending a month-long review of their 110 billion euro ($160 billion) bailout program, said Athens had made considerable progress toward repairing its finances but must step up fiscal and economic reforms… Greece likely to get aid tranche
  • A typical Cycladic island, Paros has many die-hard fans of all kinds, attracted chiefly by its friendly ambience and hospitable terrain…. Paros: An island for all tastes

  • Archimedes moved the world because he always knew where he stood

    “Give me a place to stand and I will move the earth.”


    Archimedes moved the world because he always knew where he stood
    By Evaggelos Vallianatos.

    Published in The National Herald, April 30 – May 6, 2011.

    Read full article.

    Celestial Computers of Ancient Greece

    Just before Easter 1900, Greek sponge-fishers were on their way to the waters of Tunisia when a violent storm threw their boats to Antikythera, a tiny island located north of Crete in the Aegean.

    After the storm, the sponge-fishers explored the waters of Antikythera for sponges. One of the divers, Elias Stadiatis, discovered the remnants of an ancient ship full of statues – horses, men, women, and vases.

    Of several treasures, the most precious was a very small piece of metal with gears, which the archaeologists of the National Museum in Athens originally dubbed astrolabe, which in Greek means, “star catcher”. Astrolabes helped figure out the position of the sun and the stars in the sky. Astrolabes were not complicated devices. However, the machine of Antikythera was complex and, eventually, Greek archaeologists renamed it the Antikythera Mechanism dated from 150 to 100 BCE.

    The shipwreck probably happened in the middle of the first century BCE. The doomed Roman ship was sailing from Rhodes to Rome. It carried looted Greek treasure: more than 100 bronze and marble statues, amphorae, and coins.

    One statue, the Antikythera Youth, is a bronze masterpiece of a naked young man from the fourth century BCE.

    Museum officials left the fragments of the Antikythera Mechanism alone until one of them, the archaeologist Spyridon Stais, saw an inscription in ancient Greek on one of the dials. Others noticed perfectly cut triangular gear teeth. It was May 1902.

    In 1905, Konstantinos Rados, a naval historian, said the Antikythera device was too complex to be an astrolabe.

    In 1907, the German philologist Albert Rehm sided with Rados. Rehm correctly suggested the Antikythera clockwork resembled the Sphere of Archimedes that Cicero saw and described in the first century BCE.

    Archimedes, a mathematical genius and engineer of the third century BCE, was the greatest scientist who ever lived. He is the father of mathematical physics and mechanics that made the Antikythera computer possible.

    Cicero said the planetarium of Archimedes reproduced the movements of the sun and the moon, including those of the planets one could follow with naked eye: Venus, Mercury, Mars, Saturn and Jupiter. The moon, Cicero said, “was always as many revolutions behind the sun on the bronze contrivance as would agree with the number of days it was behind it in the sky. Thus the same eclipse of the sun happened on the globe as would actually happen [in the sky].”

    The next important phase in the decipherment of the Antikythera Mechanism starts with Derek de Solla Price, a British physicist and historian of science teaching at Yale University. In 1974, he left us a scientific record of his assessment. This was Gears from the Greeks, a masterful account of how he decoded the Greek computer.

    Price took 16 years studying the intricacies of the Greek device. He reported that the Antikythera Mechanism was “one of the most important pieces of evidence for the understanding of ancient Greek science and technology”.

    He explained why:

    The complex gearing of the Antikythera Mechanism shows a more precise picture of the level of Greco-Roman “mechanical proficiency” than that coming out of the surviving textual evidence: this “singular artifact,” he said of the Antikythera Mechanism, “the oldest existing relic of scientific technology, and the only complicated mechanical device we have from antiquity quite changes our ideas about the Greeks and makes visible a more continuous historical evolution of one of the most important main lines that lead to our civilization”.

    Yes, science from the Greeks is a straightforward highway to us. It materialises in technology like the one found in the lump of metal with gears. And that device, housed in a wooden case the size of a shoebox or dictionary, after a tortuous path, became Western technological culture.

    Price described the differential gear of the Antikythera Mechanism as the landmark of the computer’s high tech nature. This was the gear that enabled the Antikythera Mechanism to show the movements of the sun and the moon in “perfect consistency” with the phases of the moon. “It must surely rank,” Price said of the differential gear, “as one of the greatest basic mechanical inventions of all time”.

    In fact, after the Antikythera Mechanism-like devices almost vanished in late antiquity, the differential gear did its own disappearance for more than a millennium and a half. It reappeared in 1575 in a clock made by Eberhart Baldewin in Kassel, Germany.

    It was this gear from the Greeks, and the clockwork culture that moved it along, that advanced the technology of cotton manufacture in the 18th century. Eventually, the differential gear ended up in cars in late 19th century.

    Price complained that the West judges the Greeks from scraps of building stones, statues, coins, ceramics, and a few selected written sources. Yet, when it comes to the heart of their lives and culture, how they did their work in agriculture, how they built the perfect Parthenon, what kind of mechanical devices they had for doing things in peace and war, how they used metals, and, in general, what the Greeks did in several fields of technology, we have practically nothing from the Greek past.

    “Wheels from carriages and carts survive from deep antiquity,” he said, “but there is absolutely nothing but the Antikythera fragments that looks anything like a fine gear wheel or small piece of mechanism. Indeed the evidence for scientific instruments and fine mechanical objects is so scant that it is often thought that the Greeks had none.”

    Price died in 1983.

    In 2005, a British mathematician and filmmaker, Tony Freeth, put together a group of international scientists to get to the bottom of the ancient Greek computer.

    Freeth convinced two companies to volunteer their high tech imaging technologies for the Antikythera Mechanism: X-Tek from England and Hewlett-Packard from the US.

    The scientists and engineers who decoded the Antikythera computer concluded that it was the most sophisticated technology in the Mediterranean for more than a millennium. They published their reports in the November 30, 2006 and July 31, 2008 issues of Nature. (These articles and other relevant data can be found on the site of the Antikythera Mechanism Research Project.)

    According to the 2006 report, the Antikythera Mechanism “stands as a witness to the extraordinary technological potential of ancient Greece, apparently lost within the Roman Empire”.

    The story, however, is more complicated. It was the Christianised Roman Empire that devoured Greece. In all likelihood, the fires of the mint and the blazes of the smelters ate Antikythera Mechanism-like devices, which in the Christian society of Rome lost all utility and meaning.

    The celestial Antikythera device provided the names of the Panhellenic games like the Olympics.

    The scientists who studied it were right that this “artifact of ancient gearwork” was more than a device of pure astronomy: “exhibiting longitudes of heavenly bodies on the front dial, eclipse predictions on the lower back display, and a calendrical cycle believed to be strictly in the use of astronomers on the upper back display.”

    The first inscription on the back of the Antikythera Mechanism reads: “the spiral [ΕΛΙΚΙ] divided into 235 sections.” This meant that one of the back dials was a spiral representing the 19-year Metonic moon and sun calendar of 235 months. Other back dials predicted the eclipses of the sun and the moon. The front dials, on the other hand, were about the months of the year, the zodiac run clockwise around them. The inscriptions on these dials explained which constellations rose and set at any specific time. Moreover, the front dials showed the movement and position of the sun, moon and the planets in the zodiac. They also revealed the date and phase of the moon.

    The ideas of Hipparchos, the greatest Greek astronomer, found expression in the Antikythera computer. From about 140 to 120 BCE he had his laboratory in Rhodes. More than other Greek astronomers, he made use of the data of Babylonian astronomers. But like the rest of the Greek astronomers, he employed geometry in the study and understanding of astronomical phenomena. He invented plane trigonometry and made astronomy the predictive mathematical science it is today. In addition, he discovered the “precession of the equinoxes”.

    This meant he proved the fixed stars are not really fixed stars but very slow movers that appear to be stationary. He left a list with all his astronomical observations, including the observations he borrowed from the Babylonian and Greek astronomers.

    The connection of Hipparchos to the Antikythera Mechanism is in the front bronze plate of the device where pointers displayed the positions and speed of the sun and the moon in the Zodiac.

    Hipparchos knew the moon moved around the earth at different speeds. When the moon is close to the earth, it moves faster than when it is farther from the earth when it slows down. This is because the moon’s orbit is elliptical, not the perfect circular movement the Greeks associated with the stars. Hipparchos resolved this difficulty with his epicyclic lunar theory, which superimposed one circular motion of the moon onto another, the second movement having a different centre.

    The Antikythera Mechanism modeled the ideas of Hipparchos with one gearwheel sitting on top of another, but located on a different axis. A pin-and-slot mechanism then takes under consideration the non-circular or elliptical orbit of the moon. A pin originating from the bottom wheel enters the slot of the wheel above it. When the bottom wheel turns, it also drives around the top gearwheel. However, the wheels have different centers and, therefore, the pin slides back and forth in the slot, which enables the speed of the top wheel to vary while that of the bottom wheel remains constant.

    Geminos was another astronomer who influenced the development of the Antikythera Mechanism. Geminos flourished in Rhodes in the first century BCE. His book, Introduction to the Phenomena, includes ideas that resemble the inscriptions in the Antikythera Mechanism on the names of the months; which years had 13 months, which month would be repeated in those years, and which months had 30 and which had 29 days. The scientists who studied the Antikythera Mechanism, reading its inscriptions, saw the hand of Geminos in the Antikythera device.

    Geminos worked from a legacy of astronomical and scientific thought that mirrored the Greeks’ knowledge of the heavens.

    The Greeks also developed mathematical astronomy from their observations of the sky. This and the clear insight of trigonometry in its applications to the problems of the heavens established the data for measuring the phenomena of the stars. Hipparchos in Rhodes and other scientists in different centres of scientific studies set up the infrastructure for building and using Antikythera Mechanism-like machines.

    The Korinthos/Syracuse case for this development has the advantage of evidence etched right on the back of the Antikythera Mechanism. The names of the months inscribed in the computer are names of months one finds in the calendar of Korinthos and its colonies, including Syracuse, home of Archimedes. Seven of those names are identical to the names of the months in the calendar of Tauromenion in Sicily founded by Greeks from Syracuse in the fourth century BCE.

    All the cycles in heavens, especially those of the sun and the moon, were captured in the Antikythera Mechanism. The Greeks used their mathematics, especially geometry, to simulate astronomical phenomena, creating an accurate universe with gears.

    Could it be that Hipparchos who explained why the moon changes speed while zooming around the earth, created the first astronomical computer, something like the Antikythera Mechanism? It’s quite possible he did, but Archimedes is a more reliable candidate because he built a planetarium and, more than that, he, like Aristoteles, was crucial in the making of the Greek golden age of science. He measured curved surfaces and applied mathematics for the study and understanding of nature. He deciphered the book of the cosmos and became the model for Galileo Galilei and Isaac Newton.

    If Archimedes did not build the prototype astronomical computer, its designer was clearly indebted to him.

    The Greek physicist Antonis Pinotsis studied the coins of Rhodes and he noticed an interesting evolution in the ray-crowned head of the god Sun/Helios on the Rhodian coins that harmonised with the advances in the astronomical knowledge in the island. That is a great insight. However, even if that observation is accurate, and in all likelihood it is, science and advanced technology in the Alexandrian era became Panhellenic, spreading fast from polis to polis, possibly from Syracuse to Rhodes or from Rhodes to Korinthos.

    Thus, the Antikythera computer predicted lunar and solar eclipses and tracked down the movement of the moon and the sun and the other planets. In addition, it was a calendar for the most important agricultural and religious events in the Greek world. That calendar, for example, helped the Greeks to offer the same sacrifices to the gods at the same times of the year.

    The scientists who studied the computer concluded that it was “a microcosm illustrating the temporal harmonisation of human and divine order”.

    The roots of the Antikythera Mechanism are deep in Greek culture.

    Platon, one of the fountainheads of Greek thought, loved more than theory. He admired the mathematical nature of craftsmanship. Indeed, he was a mathematician. Without counting, measuring and weighing, Platon said, arts and crafts would be pretty much worthless. Men would have to resort to conjecture and guesses in dealing with each other and in doing things.

    Aristoteles, who shaped the nature of science, also admired craftsmen and inventors for their useful devices and wisdom. In fact, of all the social classes in a polis, he considered the class of mechanics the most essential. No polis could exist without the mechanics practicing their arts and crafts. Of those arts and crafts, Aristoteles said, some are “absolutely necessary” while others contribute to luxury or enrich life.

    Philon of Byzantium, writing in late third century BCE about mechanics, is emphatic that advancements in technology rely on theory and trial and error.

    As late as the fourth century of our era, the Greek mathematician Pappos of Alexandria praised mechanics as “a science and an art”, useful “for many important practical undertakings” as much as being prized by philosophers and mathematicians.

    Crafts and mechanics among the Greeks, including the technology of the Antikythera Mechanism, were scientific and fundamental to their culture and life.

    Francois Charette, professor of the history of natural sciences at the Ludwig-Maximilian University in Munich, Germany, studied the Antikythera computer and concluded that “mind-boggling technological sophistication” must have been available to those who made it.

    Evaggelos Vallianatos is a Greek writer living in the US and writing on Greek history and ecopolitical issues. He is the author of This Land is Their Land and The Passion of the Greeks. His website, Through Greek Eyes, is here.

    Apple Engineer Recreates Antikythera Mechanism with Legos

    See the video and read the comment below.

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