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The Drachma, being a convertible currency, will be as hard as the Euro.  It just won't be worth as much, and that value will take a while to be established at a stable level.

The recession makes most tourists much more price sensitive which gives Greece with a radically devalued currency a huge advantage in capturing market share.

The housing boom would be caused by foreigners buying up holiday homes at (for them) knock down prices - and also by wealthy Greeks repatriating their money to buy up assets (of all kinds) at very cheap prices for their (Euro) assets.

One of the negative consequences of devaluation - at least in the short term - is to exacerbate the relative inequality between foreigners and Greeks, and between wealthy Greeks (with foreign assets) and local Greeks. However the repatriated wealth should increase the tax base available to a (progressive) Greek Government.

My suggestion is that the Euro Crisis also spells the end of of the dominance of EPP politics/Austrian economics.

I don't read much German media, but I would hope that Merkel is being excoriated even in Germany for her racist comments. Certainly there seems to be a shift away from the CDU for all sorts of reasons, one of which is the mishandling of Germany's relations with the rest of the EU...

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue May 31st, 2011 at 03:10:41 AM EST
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