Last days there were some rumours among the pundits on
Greece and wanting to leave the Euro. Ireland
Both would have their reasons for it.
Two different reasons in two different countries, but for both the same recipe: leaving the Euro.
I can image that this sounds like a good solution among the American and Anglo-Saxon Eurobashers and the “average Joe and Nikos in-the-street”.
But in reality: how logical is it to do it?? In my opinion it is NOT logical at all.
Both countries suffer already from a sh*tload of debt and miserable opportunities to repay this debt. That is indeed a big problem, that asks for a vigorous solution
When you think of leaving the Euro, however, it is not like you put a sign on the wall:
"Welcome ΔΡΑΓΜΕ. No Euro’s allowed”
- Old / new Greek money must be printed on the printing presses where now Euro’s are printed. In amounts that are beyond recognition
- There must be change points everywhere were Euro’s can be changed for drachmes
- All ATM’s need to be changed again,
- All cash registers and pin machines need also to be changed
- All pricetags in the shops need to be changed.
- All pricelists, menu’s and advertisements need to be changed
- All import- and export contracts needs to be renegotiated.
- The Greek population needs to be re-educated in the value (of lack thereof) of the drachme.
At the same time there is no country to help you and support you and act as a sounding board for you. Besides that, nobody wants to have you around with your “vintage” money: everybody knows that in a short time the Drachme won’t be worth the paper it is printed on. At the same time the logistical nightmare is the worst in Greece with its thousands of islands.
And do you really think the tourists will show a happy smile, when they have to purchase drachmes again?? The tourists, that are one of the few sources of income in Greece? The tourist that are all too happy to go to Turkey for an all-inclusive treat??
Although the problems for Ireland might be a little bit less pressing, due to the geographical and economical characteristics, the logistical nightmare is the same there.
So don’t count on some country leaving the Euro. What can you count on, probably? Here are some suggestions:
- Greece and Ireland renegotiating the terms of the European loans they receive, asking for a lot less interest to pay
- Greece and Ireland writing off or even defaulting on sovereign bonds
- Greece and Ireland giving foreign banks and other European countries “the finger” on repaying their debt. Look carefully at Iceland trying to do so currently after the Landsbanki scandal.
Don’t say I didn’t warn you!
Think of the consequences: