The Minister for Finance Prof. Edward Scicluna discusses the reemergence of the ‘Grexit’ debate, which revolves around the question whether Greece is set to exit the Euro Zone in the wake of its recent economic troubles and ailing competitiveness.
Noting that this is the second time that a Grexit is being discussed, Minister Scicluna explains that the main factor prompting the Grexit is that should Greece re-acquire its own currency, it would allow its economy to regain its competiveness as exports would be cheaper.
Prof. Scicluna underlines that irrespective of whether Greece remains a member of the Euro Zone or not, it will still have to pay back the loans it received from various countries, among them Malta. To refuse to repay its loans would isolate Greece from the financial world, with disastrous consequences for its economy.
Prof. Scicluna goes on to note however that economic studies have shown that Greece has in fact experienced an internal devaluation, where wages, pensions, and their costs dropped substantially. He however notes that exports fell at the same time, so this competitiveness could not be exploited.
– Saturday, 10th January, 2014