Greece risks 'return to drachma'

[AtW]

Maria Damanaki, the European Commissioner for fisheries, and who was appointed by Greece's ruling socialists, said her country faces having to exit the currency unless warring parties can agree to makes the sacrifices needed to resolve its debt crisis.

The Greek government strongly denied previous rumours that Athens was considering leaving the eurozone, but Ms Damanaki said the situation's gravity had forced her to "speak openly" about the dilemma facing her country.

"The greatest achievement of post-war Greece, [joining] the euro and the European course of the country, is at risk," Ms Damanaki said. "The scenario of Greece's exit from the euro is now on the table, as are ways to do this.

"Either we agree with our creditors on a programme of tough sacrifices and results ... or we return to the drachma. Everything else is of secondary importance."

Her warning came as thousands gathered in Athens to protest against their government's plans to make further savings and politicians denied stories of a planned referendum on tougher austerity efforts, having failed to win opposition support.

Greece's international rescuers, the International Monetary Fund and its European partners, will not commit to new aid on top of Greece's €110bn (£95bn) bail-out unless it delivers fresh reforms and shows that they have broad support.

Source: Greece risks 'return to drachma' - Telegraph

-------

Ok, let's say they do it - Greece ditches euro ... so what - great news for eurozone as it won't be needing to cover losses there!

Now is Germany or France tried to do that, then it would be risk to euro...

[alreadypacked]

Plan B
1. Print Drachma
2. Leave the Euro
3. Set the rate of exchange at Euro entry level.
4. Pay IMF back with printed Drachma.
5. Drachma crashes
6. Shops etc. in Greece continue to use Euro (like some other Eastern European countries)
7. Debt free in less than 6 months.

RESULT!

[Old Greg]

Plan B
1. Print Drachma
2. Leave the Euro
3. Set the rate of exchange at Euro entry level.
4. Pay IMF back with printed Drachma.
5. Drachma crashes
6. Shops etc. in Greece continue to use Euro (like some other Eastern European countries)
7. Debt free in less than 6 months.

RESULT!

It's the only way.

[MrMark]

4. Pay IMF back with printed Drachma.

I think I see a potential flaw in this plan. Still, they're not going to pay it back anyway, are they?

[alreadypacked]

I think I see a potential flaw in this plan. Still, they're not going to pay it back anyway, are they?

Why not, they got billions of Euro, why would the not handover a few ton of printed paper. Bargin!

[doodab]

Plan B
1. Print Drachma
2. Leave the Euro
3. Set the rate of exchange at Euro entry level.
4. Pay IMF back with printed Drachma.
5. Drachma crashes
6. Shops etc. in Greece continue to use Euro (like some other Eastern European countries)
7. Debt free in less than 6 months.

RESULT!

It won't work. € denominated bonds need to be paid back in €, which means they need to buy € with the Drachma. They can say the exchange rate is whatever they like but nobody with any sense is going to sell them € at that price.

[alreadypacked]

It won't work. € denominated bonds need to be paid back in €, which means they need to buy € with the Drachma. They can say the exchange rate is whatever they like but nobody with any sense is going to sell them € at that price.

£ was backed by gold, I think Gordon sold it. If the £ is not backed why would the Drachma need to be backed.

[doodab]

£ was backed by gold, I think Gordon sold it. If the £ is not backed why would the Drachma need to be backed.

Who said anything about being backed by gold?

The Greeks would need to persuade someone to swap them € for drachma so that they have € to give to the people they owe. Nobody in their right mind will swap € for a currency that is going to rapidly devalue, so the Greeks will be unable to obtain the € they need. In fact, their efforts to buy € with drachma would contribute to the devaluation.

[AtW]

Plan B
1. Print Drachma
2. Leave the Euro
3. Set the rate of exchange at Euro entry level.
4. Pay IMF back with printed Drachma.
5. Drachma crashes
6. Shops etc. in Greece continue to use Euro (like some other Eastern European countries)
7. Debt free in less than 6 months.

RESULT!

Debt is in euros, you can't pay it in drachmas.

HTH

[MrMark]

Who said anything about being backed by gold?

The Greeks would need to persuade someone to swap them € for drachma so that they have € to give to the people they owe. Nobody in their right mind will swap € for a currency that is going to rapidly devalue, so the Greeks will be unable to obtain the € they need. In fact, their efforts to buy € with drachma would contribute to the devaluation.

Or they could sell Corfu for x billion Euros...