Quote Originally Posted by Fuchs View Post
What the Greeks really need is someone who leaves the Euro, converts all debt to free exchange rate Drachme, inflates the debt away and by the way also breaks the sticky wages that inhibit many reforms.
Greece could be out of its troubles by 2020, if only it leaves the Euro and gets rid of the debt. It might become unbearable as EU member by doing so, though.
Maybe it could let its membership rest (= not being subject to EU rules and decisions, but also no Greek bureaucrats in Bruxelles, no Greek EU parliament or commission seats and no Greek vote in the councils).
Ok, let's assume that Greece will leave the Euro.

Given the following assumptions on my part, I have some questions.

First the assumptions:

  • The Greek Drachma will trade below the Euro. Let's assume 341 Drachma to the Euro for the purposes of this conversation at the start of the exit from the Euro, and that as more information regarding Government debts surfaces the conversion rate will further drop against the Drachma.


  • Greek government employee rolls will be decreased, resulting in an increase in unemployment....government employees, companies offering government services, etc.


  • Greek social services will be decreased, resulting in increased uncertainty and restlessness in a vulnerable segment of the population.


  • The average Greek will act to maximize their lot in life.


Now the questions:

  • Given that the average Greek is aware that a hypothetical 1,000 Euro's in his/her bank account is about to lose value in the conversion to Drachma, how will bank runs be controlled? (An exchange rate of 1 Euro = 341 Drachma today, perhaps worse tomorrow) Corralito?


  • How does the precedence set with your proposed course of action for Greece impact Slovenia, Ireland, Portugal, Italy, Spain, and potentially France?


  • What are the measures to be put in place to prevent bank runs in the rest of Europe?


  • What are the anticipated impacts of the exit of Greece from the Euro upon the rest of the world?