CONSEQUENCES OF LEAVING THE EURO
This topic proposes the idea of leaving the Euro in Spain. What consequences would result after this decision in the economy and in the lives of citizens in terms of growth, employment and development? The aim here is to speculate on the possible consequences with analysis.
Looking back, the Euro seemed a good tool for European development, but nowadays it is questioned and there are voices arguing in support of exiting the single currency. But the effects must be considered initially, with a decision subsequently following.
First of all, if we left the Euro, the first consequence would be a decrease in the value of the new currency, it would be very low and weak; in this case our salaries, deposits and assets would be redenominated into the new Peseta, but our debt, our sovereign debt would be still denominated in the Euro. Therefore if our debt increased, we would owe more than today.
Secondly, after the devaluation and the increase of the debt, the next consequence would be a default; we would not be able to pay it as we could not afford it. In the event of a default, there would be a subsequent lack of investors willing to lend money to Spain. Economic trust would be broken, at least for the short or medium term.
Furthermore, if Spain were unable to borrow money, we would have a lack of income. In this scenario growth would be impossible, rendering the economy impotent. It would become trapped, with perpetual stagnation resulting in dramatic consequences for employment and essential services.
Although these negative points are highly persuasive, the positive benefits must be considered.
Firstly, regarding the devaluation of the currency, our goods and services would become cheaper, and therefore our export could be the key to provide new capital.
In addition, if we left the Euro we would be more independent and we would have our own Central Bank and monetary control. MAYBE ANALYSIS THIS MORE (IF YOU HAVE TIME)
Ultimately, it seems that the negative consequences would outweigh the positives. In spite of this, I think it would be more beneficial to stay in the Euro, although not at any price. What we cannot do is nothing. If we stay in the Euro, things have to change in order to improve the welfare of the citizens, Without any changes or progression, we would be better of out the Euro. What it certain, is if we leave the Eurozone there would be no turning back. It is a one way road.
CONSEQUENCES OF LEAVING THE EURO
Intro
Negative effects:
* Depreciation of the new currency
* Default
* Distrust in our economy
Positive effects:
* Exports more competitive
* Independence of decision-makers
Conclusion