Norway has seen its' Krone devalued by between 20-30% against the major currencies as a result of the collapse in the price od oil. Yet life here is not a round of terrible inflation and shortages.
The late seventies' 'great lie' the media called it. Jim Callaghan, the then PMOUK, announced to the public that the pound would be devalued, in order for exports to be more competitive, with the alleged lie being "of course this doesn't mean the pound in your pocket will be worth any less". Labour was derided at the time, and the post empire UK labelled 'the sick man of Europe'.
We had the concepts of being competitive on a high value pound and being told to accept the fate of not being able to be as productive in the UK as the far east. While many commodoties and compoonents fell relatively in price, the strong pound helped the finance industry lever itself up the international ladder while manufacturing ebbed away. We swallowed the new lie that capitalism would take better care of us, from cradle to grave in return only for honest, hard work.
However 'Callaghan's great labour lie ' is probably the best cure today for Greece, but unfortunately they dont have the option without even more pain. If Europe's oldest democracy had retained their own currency, the Drachma, then they could have been enjoying the biggest upswing in their economy since their poat war hey days of oil tanker fleets and the jet set tourist. In the european order of worker poor, owner rich with flat wages and real term errosion of discretionary income, the chance of a cheap-as-chips holiday would mean that there would be growth in tourist numbers which would eclipse the numbers of refugees landing on their shores.
The huge unsung hero of western economies in the face of far east manufacturing, has been service engineering - mending and make do, refurbishment and routine maintenance on all those machines now built in the east, but designed in the west and
In need of a shorter down time than shipping back to their factory sites permits. Greece still has a maritime industry which could have become competitive overnight.
Alas Greece joined the Euro and in that went like a horse and cart with the sickdom of the tertiary economy, the debt orgy and meta democracy. Staying with the Drachma could have been a more natural barrier to the loans-feast whixch the state and national banks took part in. Leverage risk would have been reflected in currency transactions, and even in a an ERM where a fall out would have alerted the CEB, the IMF and the global banks to the trouble Greece may have been in.
Norway has retained its own currency and has the calamity of low oil prices to cope with now. The worst doom sayers predict that as much as a quarter of the workforce will be made unemployed, with a higher level of youth unemployment, wider scale under-employment and for the first time in two generations, worker emmigration. However on the one side the 'oil fund' is being engaged to provide balance in the state budget and some may be used on much needed infrastucture projects. At the same time though, the government dont have the resources to float the currency at pre-2015 levels when the oil flowed over 100 USD per barrel, in order to sustain consumer spending power and cheap commodity import.
Neither do they want to. Other industries like fishing-aquaculture, IT and aluminium are suddenly 20% or more price competitive conpared to 2014 and can recruit the best engineers now. Commodity prices have fallen as general demand has waned, yet some markets are strong such as aluminium alloy wheels for higher value cars, and now the phoenix of solar panel production can be competitive on a world stage.
The norsk krone has devalued between 20 and 30% against the major currencies within a year, and shows no signs of climbing. However retail price inflation is negligible. Much to the contrary of the Farming Industry PR about a future global food shortage, grain has never been cheaper relative to currency in modern times. Freed from the US dumping of subsidised grain on the African 'Aid' market, farmers in the third world can gain a market price on their grains. Norway is a net importer of calories , but has a large, semi protected market for meats and dairy and consumes more fish per capita than most any other EU-EEA country which is predominantly landed in the domestic ports.
Also the potential price increase on things like foriegn holidays is off balanced by falling demand and importer-retailers taking a similar margin hit in order to maintain top line in Krone and hold onto market share. So in fact within the new-world-interest-rate-order, the krone in your pocket really isn't worth that much less until you go abroad.