Is a New Drachma on the Horizon for Greece?

greek drachmaIt is no secret that Greece has struggled mightily financially in recent years. It is one of the key reasons for some of the problems with the Euro too. Greece’s newly elected government is searching for solutions to relieve the financial crisis in the country and one of the things that has been discussed is bringing back the old currency.

This thinking by Greece has raised a lot of financial fears in Europe and Greece because of what happened when the opposite currency exchange took place several years ago. Some of this comes about undoubtedly as a tactic by Greece’s new government to put pressure on the European Union to help them more with their debt crisis.

Despite all the talk of Greece leaving the Eurozone, many analysts see this as having a very low probability of it happening. They have their hands somewhat tied by the two bailouts they have received since 2010 that total almost 250 billion Euro. There has been a lot of tension going back and forth between the government of Greece and the Eurozone for a while now. Experts also think that this would deal a death blow to Greece financially because converting to the Drachma will not eliminate their debt to the Eurozone and Greece’s credibility would be all but lost in the World’s financial markets.

Not to mention, Greece would have problems designing and paying for the new currency under its current financial crisis, so don’t be looking for Greece to convert to the Drachma anytime soon.

 

John Miller
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John Miller

John has worked in investment banking for 10 years and is the main author at 7 Binary Options. He holds a Master's degree in Economics.
John Miller
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