FINANCE

GUPTA EMPIRE
GRE-XIT

Introduction of Greece
Greece in 1832 formed an independent country. The Greek War
of Independence (18211829), also commonly known as the
Greek Revolution, was a successful war by the Greeks who won
independence for Greece from the Ottoman Empire.
Drachmas were introduced in 1832.
In 2001 Greece entered the Eurozone.
Their main source of economy agriculture and industries.
With tourism as a growing sector is has become a vital source of
income.
Agriculture being one of the major sources of income was
depleted to 5% due to the industrial takeover.
Greece dependency on tourism increased which took a blow
during European and US recessions.
As time passed, governments failed to run a stable state which
led to increase in debts majorly to Germany and France.
As the Fiscal Deficit is controlled by the Eurozone and the
liberty not in the hands of Greece the economy was hit.
By 2009, the budget deficit had reached 13.9%.
The economy shrank

 Taxes were bad, unemployment raised to 25% , poverty to 30%.

Greece not having any control over the Euro was left with
roughly 45 Euros per person.
This led to what we know as GREXIT.

WHAT IS GREXIT?
To understand this clearly, Grexit is not removing Greece
from the European Union, but removing it from the
Eurozone.
What this does is, it gives Greece the complete control over
its currency and yet free to trade in the European Union.
It gives Greece the time and a chance to pay back the debts
owed and control the Economy.
WHAT ARE THE CONSEQUENCES?
The immediate consequence is the drop of the economy of
the country and slowly depletion of the value of its currency.
If the economy not controlled, it becomes impossible for
Greece to payback any debts and they Lose the loan which

could be provided by the Toika.

The value of the goods decreases.
The ability to control imports becomes impossible.
Lose trade relations with multiple countries.
The inability to stabilize the currency.
Industries and companies shut down due to bad economy.

 Increase in poverty and unemployment which makes

problems worse, decreasing the value of land and assets.
SOLUTION
RE-INTRODUCTION OF DRACHMAS
Drachmas will be the new currency for the country of Greece.
It will help bring Morale and build confidence in the people.
It will remind people of the strong independent Greece from
1832.
APPROPRIATE VALUATION OF THE CURRENCY

1 Euro = 50 Drachmas initially.

Gradually decreasing from 50 to 100-120.
Hoping to stabilize around 75-80.
In order to reach target 1 euro must be equal to 30 Drachmas.

BUDGET DEFICIT
The government must control the budget deficit from 13.9%
back to 5%.

FISCAL & MONETARY POLICIES

Taxes must increase by 25%-35%.
Strict regulation of taxes must be implied.

 Taxes collected should be stored and used to increase the

economy of the country by helping the country develop trade,
agriculture, export import etc.
The deficit spending must decrease gradually.

CORPORATE TAX RATES

Corporate tax rates must increase as the economy increases.
The corporate tax rates have increased from 26%- 29% as of
1st January 2015.
It has reached the all-time high of 49% in 1985 and 20% in
2011.
Averaging at 36.37% from 1981-2015.
Corporate taxes must be stabilized where collecting and
giving taxes becomes easy.
PRIME LENDING AND PRIME BORROWING RATES
Increase the borrowing rates which reduces the rate of people
borrowing money.
Increase the lending rate to private individuals and decrease for
corporate loans.

POLICIES TO MAKE PEOPLE PAY TAXES

Strict implementation of taxes- where minimum fine to
maximum jail time must be implemented directly to the person
violating tax laws.

Make taxes easily payable and not complex

Create a govt. entity which regulates taxes.
Should be implemented for all sorts of companies or business.
The usage of taxes should be monitored regularly and

reasonably maintained.
Implementation of taxes on product should be to decrease
demand and help maintain economy.
Taxes to be used to invest in companies for the growth of
economy.
Decrease taxes on exports and increase taxes on import.

CONCLUSION
These policies can help Greece to settle all its debts.
Helps stabilize its economy and value of its currency.
It can help Greece expand its trade relations and bring about a
change in the system of its control.

Greece will be the first but not the last to exit Eurozone.