Athens Mulls Plans for New Currency; Greece Considers Exit from Euro Zone

[Richard Hakluyt]

Well now, Greece has a GNP somewhat smaller than New Jersey's............so who gives a shit?

OTOH I guess we can set up some sort of fiscal domino theory that could be consequential 

[Norgy]

It's a rather weak plan, though.

We have debts. In Euros.
Hmm. If we get a new currency and stop using Euros...?
Good idea! Let's do that! Tie it to kalamata olives and yoghurt!

[Zanza2]

OTOH I guess we can set up some sort of fiscal domino theory that could be consequential 

That's the only reason anybody cares.

Greece has enough public and private foreign debt to wipe out a considerable part of the capital of foreign banks if it restructures or defaults on its debt. Some of the most exposed countries are themselves in dire straits, so there could be the necessity to recapitalize banks in other countries. Which might be too expensive for those countries too. If Portugal restructures, Spain will be hit worst. If Spain restructures, Germany, France and Britain will be hit badly. If Ireland restructures it's the same.

All of these countries have way more debt and obligations than Lehman Brothers and the exposure will mean that the interbank lending market will freeze up again.

And of course there is the direct cost to the ECB, which is now the lender of last resort to all of these countries. But the ECB has very little capital and gigantic leverage. If they have to write down their lendings, they'll need new capital quickly, i.e. tax money from the Eurozone countries. Unlike the Fed, the ECB can't just create money from thin air.

[Martim Silva]

How would they tell whether one Euro is a Greek Euro rather then say a French Euro or German Euro?

In coins, the reverse has a national sign of the country that minted them. See them for yourself:

http://www.ecb.int/euro/coins/2euro/html/index.en.html

In banknotes, although they're theoretically competence of the ECB, in fact each one indicates which nation printed them. It's the first letter in the banknotes' code. Greek notes start with 'Y', German ones with 'X', Portuguese ones with 'M', and so on.

Here is the complete letter and country:

Z    Belgium
Y    Greece    
X    Germany
W   Denmark (when it joins)
V    Spain    
U    France    
T    Ireland
S    Italy    
P    Netherlands    
N    Austria    
M    Portugal
L    Finland
K   Sweden (when it joins)
J   United Kingdom (when it joins)
H    Slovenia    
G    Cyprus    
F    Malta
E    Slovakia
D    Estonia

[Caliga]

Well, the Euro is a bad idea (or at least a good idea badly implemented), so maybe Greece's idea isn't so bad after all.

[Valmy]

Well, the Euro is a bad idea (or at least a good idea badly implemented), so maybe Greece's idea isn't so bad after all.

I thought so to but the fact that the hilarious inept Greek government is against it makes me think it must actually be a good idea.

[Razgovory]

How would they tell whether one Euro is a Greek Euro rather then say a French Euro or German Euro?

In coins, the reverse has a national sign of the country that minted them. See them for yourself:

http://www.ecb.int/euro/coins/2euro/html/index.en.html

In banknotes, although they're theoretically competence of the ECB, in fact each one indicates which nation printed them. It's the first letter in the banknotes' code. Greek notes start with 'Y', German ones with 'X', Portuguese ones with 'M', and so on.

Here is the complete letter and country:

Z    Belgium
Y    Greece    
X    Germany
W   Denmark (when it joins)
V    Spain    
U    France    
T    Ireland
S    Italy    
P    Netherlands    
N    Austria    
M    Portugal
L    Finland
K   Sweden (when it joins)
J   United Kingdom (when it joins)
H    Slovenia    
G    Cyprus    
F    Malta
E    Slovakia
D    Estonia

So what happens to Greek Euros if Greece leave the Eurozone?  Also what about the Euros that exist only on banksheets and in computers?  How do you divvy up these virtual Euros?

[Drakken]

K   Sweden (when it joins)
J   United Kingdom (when it joins)

How do you like your rosy-tainted glass, Candide?

[Valmy]

Pity Sulla is not still around to put Athens in its place.

[Drakken]

Pity Sulla is not still around to put Athens in its place.

I'd go with Lysander of Sparta, he did a more bang-on job when Athens was being a real pain in the ass. Sulla just dealt with the leftovers.

[Razgovory]

Well, the Euro is a bad idea (or at least a good idea badly implemented), so maybe Greece's idea isn't so bad after all.

It's a good idea in theory, as is the rest of the EU.  But they expanded far to quickly.

[Ed Anger]

Pity Sulla is not still around to put Athens in its place.

Sulla.

[Monoriu]

I think the problem is they have no deal mechanism to deal with countries that abuse the system.

[Caliga]

I think the problem is they have no deal mechanism to deal with countries that abuse the system.

The correct mechanism is 'blitzkreig'.  But the Germans haven't regrown the hair that the Allies shaved off their balls in 1945 yet.

[Grey Fox]

Hoppa!