Could Greece abandon the Euro and go back to their own currency? That is exactly what the Center for Economic and Business Research is advising them to do.

The Greek government has been advised by British economists to leave the euro and default on its €300 billion (£255 billion) debt to save its economy.

The Centre for Economics and Business Research (CEBR), a London-based consultancy, has warned Greek ministers they will be unable to escape their debt trap without devaluing their own currency to boost exports. The only way this can happen is if Greece returns to its own currency.

Greek politicians have played down the prospect of abandoning the euro, which could lead to the break-up of the single currency.

Speaking from Athens yesterday, Doug McWilliams, chief executive of the CEBR, said: “Leaving the euro would mean the new currency will fall by a minimum of 15%. But as the national debt is valued in euros, this would raise the debt from its current level of 120% of GDP to 140% overnight. {…}

{…} McWilliams called the move “virtually inevitable” and said other members may follow.

“The only question is the timing,” he said. “The other issue is the extent of contagion. Spain would probably be forced to follow suit, and probably Portugal and Italy, though the Italian debt position is less serious.

“Could this be the last weekend of the single currency? Quite possibly, yes.” (Source: UK Times)

Recent Posts:

• Economic Data and Earnings Schedule for September 9 2010
• Market Update
• Economic Data and Earnings Schedule for September 8 2010
• It’s Not a Bailout – It’s An Intervention
• Headed Off To College This Year And Got A Student Loan? Sallie Mae Thanks You!
• ECRI Leading Economic Indicator Drops – Again