Euro remains popular with Greeks given apprehension over drachma

By Eve Szeftel, AFP

ATHENS–Ten years of the euro have left Greece’s economy in tatters, but the single currency remains highly popular among Greeks who fear a return to the drachma would be catastrophic. Politicians never fail to hammer it home, but the polls also confirm it: Greeks want to stay in the eurozone. “Our position in Europe is non-negotiable,” Prime Minister Lucas Papademos said recently. “Greece is and will remain part of a united Europe and the euro,” added Papademos who was governor of the country’s central bank when the currency went into circulation a decade ago and went on to become a vice president of the European Central Bank. Strong support for the euro — up to 80 percent according to polls — has held up despite the deep recession and the bitter austerity measures Greece must impose to get its bailout funds. Unemployment has rocketed, with nearly half of young people now without a job. Moreover, the possibility of Greece leaving or being forced out of the eurozone is no longer an idea entertained only by the lunatic fringe. German Chancellor Angela Merkel and French President Nicolas Sarkozy warned Greeks in November that this would be the result if they didn’t quickly accept new bailout conditions — triggering compliance but renewed market unease. The British weekly The Economist, which has long argued Greece will end up eventually defaulting on its massive debt, recently organised a conference in Athens on a possible exit from the eurozone. Even former French president Valery Giscard d’Estaing, popular in Greece for his backing of the country joining the European Union, has described its adoption of the single currency as a “serious mistake”. That mistake enabled successive Greek governments to go on a borrowing binge that resulted in today’s unmanageable debt. “The debt comes from the fact that Greek leaders always confused the notion of credit with revenue,” said historian Nicolas Bloudanis.

“Joining the single currency allowed the country to borrow at low cost which let the political class reinforce its electoral base by recruiting state employees hand over fist,” he added.

Moreover, Greece failed to use the ample European funds it received in the 1980s for increasing the productivity of its industry and economy, according to Savas Robolis at Panteion University in Athens. “The viability of a million companies cannot depend on 3.7 million Greek households: they’ve got to export!” said the economics professor. However, Robolis, who is close to Greek labour unions, believes a return to the drachma would relegate Greece to the ranks of “under-developed” countries. The trend is already for Greek companies to move their manufacturing to EU countries outside the eurozone, such as Bulgaria, where tax rates and production costs are lower.