Roubini calls on Greece to return to the drachma

“The recent debt exchange deal Europe offered Greece was a rip-off, providing much less debt relief than the country needed”, said Nouriel Roubini in the Financial Times article. Roubini calls for Greece to leave the Euro and go back to the Drachma , "A return to a national currency and a sharp depreciation would quickly restore growth and competitiveness, as it did in Argentina and many other emerging markets that abandoned their currency pegs," he said.

Even if leaving the euro area would be hard, a return to the national currency “will restore competitiveness and growth, as was the case for Argentina and other emerging markets that have cut monetary anchors”, "Overnight, the foreign liabilities of Greece's government, banks, and companies would surge," said Roubini. "Yet these problems can be overcome. Argentina did so in 2001, when it converted its dollar debts into pesos. The U.S. did something similar in 1933, when it depreciated the dollar and repealed the gold clause."

"Like a broken marriage that requires a break-up, it is better to have rules that make separation less costly to both sides" said Roubini. - in The Financial Times article