"Athens Mulls Plans for New Currency: Greece Considers Exit from Euro Zone" (user search)
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  "Athens Mulls Plans for New Currency: Greece Considers Exit from Euro Zone" (search mode)
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Author Topic: "Athens Mulls Plans for New Currency: Greece Considers Exit from Euro Zone"  (Read 1231 times)
True Federalist (진정한 연방 주의자)
Ernest
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« on: May 06, 2011, 05:25:57 PM »

For a country to abandon Euro it is as feasible as a US state seceding.
There is no legal provision for something like that to happen.

I doubt that the other Eurozone members will go to war to force Greece to remain in the Euro.

The thing is, at this point does Greece really have anything to gain by staying in the Euro?  Certainly if I were in the Greek government, I'd be studying the option and be ready to use threat to leave the Euro to extract concessions from other Eurozone members.
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True Federalist (진정한 연방 주의자)
Ernest
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« Reply #1 on: May 06, 2011, 07:07:41 PM »

Junger just talked to the media after a EU meeting at Brussels and called the whole Greece-leaving-the-Eurozone idea an idiotic one.
Trust me folks, it's never going to happen for a million different reasons.

Which Junger?

In any case, Greece leaving the Euro is a lot more problematic for the remaining Eurozone countries than it is Greece, so it's no wonder a Brusselscrat would be opposed to the idea.  (Not that leaving the Euro would be the wise thing for Greece to do long term, but they might not be able to keep together the political will needed to do so.)  It's why by using the threat to leave judiciously, Greece might be able to extract concessions despite its weak economic condition.  Of course, if they do overuse it, they risk being shown the exit from the Euro once the Euro is back on a stronger footing than it currently is.
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True Federalist (진정한 연방 주의자)
Ernest
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« Reply #2 on: May 07, 2011, 06:43:48 PM »

Also, and bear in mind I'm not a financial expert, but wouldn't that mean Greece can say bye-bye to its Eurozone support?

And if Germany and the other reasonably well-off Eurozone countries cut back on that support anyway?  At present, it makes sense for all sides to work on keeping the PIGS in the Eurozone, but that won't necessarily hold true forever.  Making plans on how to bail on the Euro are prudent preparations, even if never carried out.  The interesting question is whether Greece would go back to the old drachma at the peg used to convert to the euro, or simply go with an overnight conversion of all bank accounts and loans at a rate of 1 old euro = 1 new drachma.  Probably depends on whether the Greek government stored the old currency withdrawn from circulation or had it recycled.  One would be simpler while the other could be done more quickly and with less advance notice.
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