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Posted on: May 11th, 2012 by Alima Naji No Comments

Discharging the MoU leads Greece exiting the Eurozone, Alpha Bank warns

Euro - source EU

photo: EU

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Any discussion for the formatio of a government to discharge the Memorandum and the country’s obligations arising from loan agreements leads to a forced exit of Greece from the Eurozone on its own initiative, according to the Weekly Economic Bulletin by Alpha Bank.

This will happen due to the cancellation of significant financial assistance provided to the country and will lead the Greek banking system to exit the European System of Central Banks and to a monetary (inflationary) financing of Greece’s increasing budget deficits. In particular, if Greece resorts to this action and cancels the Memorandum and the second loan agreement, and most importantly, if we leave the programme of fiscal adjustment and reform, then we lose the important aid given to the country, which, as noted, is the highest financial aid ever been offered to a country in world history.

In this case, the country will be forced to “disorderly bankruptcy” and the Greek people will bear the entire cost of dissolution of the basic institutions of the economy and the cost of exit from a crisis that will be prolonged even more, acquiring much more dimensions.

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