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2011-09-16

The roadmap of a Greek euro exit


Bild (Zeitung, not Bildt) has a detailed roadmap of a Greek euro exit as the paper imagines it. 

After the closing of the stockmarket on a Friday evening, the Greek government would declare bankruptcy and say that it only honours 50% of its outstanding debt, 
thus halving it from 350bn € to 175bn €. 

To contain the shock the Greek stock market would have to stay closed for a few days. 

The Greek banks and the ECB would have to be recapitalized. 

There would have to be capital controls. The government would reintroduce the Drachma by stamping the existing euro bills. 

The new currency would drop in relationship to the euro and the dollar thus making domestic goods competitive and allow Greece to achieve surpluses to honour its debt. 

The remaining Euro coins would have to collected by the central banks and acquire the status of a collector’s item, Bild explains. 

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