IfW in the News

The Grexit Dilemma: What Would Happen if Greece Leaves the Euro Zone?

27.03.2018

Stefan Kooths doubts whether Greece would benefit from the drachma's reintroduction in the long run.

Excerpt from the Article

(...) The Kiel Institute for the World Economy (IfW) doubts whether Greece would benefit from the drachma's reintroduction in the long run. "A clumsy devaluation would do absolutely nothing to change Greece's structural problems," says Stefan Kooths, head of IfW's forecasting center. The International Monetary Fund has a similar view of the situation. Sources at the IMF in Washington say they believe the cost of exiting the euro would be greater for Greece than continuing with reform measures.

But changing currencies could provide one key advantage for the Greek government: It could print as much money as it needed to finance the promises it made during the election campaign.

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