As markets prepare for the prospect of a Greek exit from the euro, one prominent British economist says to ABC, that Greece could face a military coup if it abandons the single currency. Financial markets have been sold down amid speculation Greece will have to leave the eurozone and abandon its debts.
But Sav Savouri, chief economist at London-based hedge fund Tosca Fund, says the country has little option but to remain in the 17-member currency bloc because the situation will be very bleak if it leaves.
Mr Savouri had a grim view of the outlook for the country if Greece returned to the drachma.
"The elderly and the infirm simply can´t feed themselves, the black market expands to proportions that you don´t see in Europe, the young professionals leave in their droves," he said.
"You´re left with a collapsing civic society, and in every instance where that´s happened the military will take over the role of government."
"The Darkest of Greek Dramas: A play for Survival"
Meanwhile according to a report published on May 16th "The Darkest of Greek Dramas: A play for Survival", Savvas Savouri explains hat given that the opinion polls suggest that most Greeks are against the continuation of severe austerity measures but pro Euro membership these elections will inevitably come down to a de facto referendum on EU membership.
The argument for a euro exit ignores the likelihood of retaliatory devaluations in neighbouring economies. The argument fails to grasp the near certain suspension/expulsion of Greece from the EU. It ignores the resulting hyper-inflation and impoverishment of the elderly and infirm. It ignores the certainty Greece would be abandoned by all but the most usurous of investors. It ignores that emigration of prime-age Greeks would go from a stream to a torrent. It ignores the certain collapse in Greek asset prices. It ignores the end of a functioning Greek banking system. It ignores these and so many other far from transient challenges. It ignores the sinister appearance of ever more powerful black-marketeers, and the sharp rise in crime. In fact, it ignores the inevitability of a break-down in Greek civil order. According to Tosca Fund, of all the prices Greece would pay for a return to currency unilaterism, the biggest would be the loss of effective democracy. We have said this elsewhere and will repeat it again; the closest parallel to a post-euro Greece might be Zimbabwe.
A Greek euro exit would effectively destroy its banking system, according to the report. This is not to say the Greek banks have much of a future were Greece to remain within the euro-bloc. Under current momentum we have no doubt Greek banks will have to be nationalised. London will be one of the primary destinations to which Greek capital will continue to escape.