Skip to content


A country’s guide to escaping the euro

If disaster strikes, how exactly does a eurozone nation hit the emergency escape button on the euro?

Once considered an outlandish scenario, it is no longer taboo among economists.

Whether it is the entire euro project collapsing or just one country jettisoning the single currency, analysts agree on rule number one: Prevent panic.

If the currency itself implodes, eurozone authorities could no longer recognise the euro as a common currency, said Paulo Reis Mourao of the University of Minho in Braga, Portugal.

“This would trigger a series of procedures that would require national central banks to issue currencies again,” he said.

The old currencies have been destroyed, even if Europeans are estimated to have kept a fair bit of the old money in their drawers: the equivalent of 6.8 billion euros in German marks, 1.7 billion euros in pesetas, 1.3 billion euros in lira and 600 million euros in French francs.

It would take months for national mints to produce new currencies, and some countries would have to abandon producing the euro during that period. Spain, for example, now prints five- and 20-euro notes.

According to a Wall Street Journal report Thursday, some European central banks are considering how to reprint their national currencies. Irish officials quoted in the story denied they were doing so, however.

If the weaker eurozone members’ currencies such as the Greek drachma, Spanish peseta and Portuguese escudo were revived, their values would likely plunge while the German mark would gain strength, analysts said.

Prices of imported products such as oil would soar.

“Our purchasing power would slump,” Mourao said. “We would need 10 to 15 years to stabilise the situation.”

The consequences — including people’s savings losing half their value, according to some studies — would be sufficiently drastic to panic entire populations and create a run on the banks.

That would lead to “a collapse of the financial system,” predicted Federico Steinberg, economist at Spain’s Real Instituto Elcano.

“The introduction of the euro was a very delicate process, planned over a period of more than two years, and so, ideally, those who want to abandon the euro would take the same time to undo it,” Steinberg said.

“The problem is that if there is an exit from the euro it will probably be abrupt and disorderly.”

One solution, analysts said, is to take people by surprise.

“Everything would have to be decided secretly in a single night and the next morning the markets, the banks would be closed for at least 12 hours to prevent anyone moving their money,” said Franco Bruni, professor at Italy’s Bocconi University in Milan.

The next step, Bruni said, would be a race between countries to devalue their currencies so as to boost exports.

“One way to do it would be to announce it one day without anyone knowing in advance: we are freezing your accounts because we are going back to the old currency,” said Gayle Allard of Madrid’s IE Business School.

But “how do you make enough notes in secret?” Allard asked.

Once a country had exited the euro, though, she predicted a “wonderful” impact on exports as it regained power over the currency and allow its value to fall.

Eduardo Martinez-Abascal, professor at IESE Business School in Madrid, said the authorities would need to mount a “spectacular” publicity campaign to explain what they had decided to do and what the advantages were.

A weaker currency had its benefits, Martinez-Abasca agreed.

“Greece would be able to sell overseas at half price,” he said, and as a cheap destination it would haul in tourists.

Then there are the legal complications to consider.

“Imagine a Spanish bank that owes money to the Netherlands. How do you calculate its debt if you abandon the euro: in florins or in pesetas?” asked Thomas Cool, former economist at the NetherlandsCentral Statistics Office.

And, he asked, would the public debt remain denominated in euros, forcing the state to default, or would it be converted into the old currency, infuriating the financial markets?

Related Posts with Thumbnails

Posted in Finance & Economics.

Tagged with , , .

Support #altnews & keep Dark Politricks alive

Remember I told you over 5 years ago that they would be trying to shut down sites and YouTube channels that are not promoting the "Official" view. Well it's happening big time. Peoples Channels get no money from YouTube any more and Google is being fishy with their AdSense giving money for some clicks but not others. The time is here, it's not "Obama's Internet Cut Off Switch" it's "Trumps Sell Everyones Internet Dirty Laundry Garage Sale".

It's not just Google/YouTube defunding altenative chanels (mine was shut), but Facebook is also removing content, shutting pages, profiles and groups and removing funds from #altnews that way as well. I was recently kicked off FB and had a page "unpublished" with no reason given. If you don't know already all Facebooks Private Messages and Secret Groups are still analysed and checked for words related to drugs, sex, war etc against their own TOS. Personally IU know there are undercover Irish police moving from group to group cloning peoples accounts and getting people booted. Worse than that I know people in court at the moment for the content they had on their secret private group. Use Telegrams secret chat mode to chat on, or if you prefer Wickr. Or if you need to, buy a dumb phone with nothing for the NSA to hack into if you are that paranoid. Ensure it has no GPS tracking on it and the battery can be removed. These are usually built for old people to get used to technology storing only a set of numbers to call. However they have no games, applications to install and other ways people can exploit the computer tracking device you carry round with you most of the day.

So if your not supporting this site already which brings you news from the Left to the Right (really the same war mongering bollox) then I could REALLY do with some..

Even if it's just £5 or tick the monthly subscription box and throw a few pound my way each month, it will be much appreciated. Read on to find out why.

Why?

Any support to keep this site would be appreciated. You could set up a monthly subscription for £2 like some people do or you could pay a one off donation as a gift.
I am not asking you to pay me for other people's articles, this is a clearing house as well as place to put my own views out into the world. I am asking for help to write more articles like my recent false flag gas attack to get WWIII started in Syria, and Trump away from Putin. Hopefully a few missiles won't mean a WikiLeaks release of that infamous video Trump apparently made in a Russian bedroom with Prostitutes. Also please note that this article was written just an hour after the papers came out, and I always come back and update them.

If you want to read JUST my own articles then use the top menu I have written hundreds of articles for this site and I host numerous amounts of material that has seen me the victim of hacks, DOS plus I have been kicked off multiple hosting companies, free blogging sites, and I have even had threats to cease and desist from the US armed forces. Therefore I have to pay for my own server which is NOT cheap. The more people who read these article on this site the more it costs me so some support would be much appreciated.

I have backups of removed reports shown, then taken down after pressure, that show collusion between nations and the media. I have the full redacted 28/29 pages from the 9.11 commission on the site which seems to have been forgotten about as we help Saudi Arabia bomb Yemeni kids hiding in the rubble with white phosphorus, an illegal weaapon. One that the Israeli's even used when they bombed the UN compound in Gaza during Operation Cast Lead. We complain about Syrian troops (US Controlled ISIS) using chemical weapons to kill "beautiful babies". I suppose all those babies we kill in Iraq, Yemen, Somalia and Syria are just not beautiful enough for Trumps beautiful baby ratio. Plus we kill about 100 times as many as ISIS or the Syrian army have managed by a factor of about 1000 to 1.

I also have a backup of the FOX News series that looked into Israeli connections to 9.11. Obviously FOX removed that as soon as AIPAC, ADL and the rest of the Hasbra brigade protested.

I also have a copy of the the original Liberal Democrats Freedom Bill which was quickly and quietly removed from their site once they enacted and replaced with some watered down rubbish instead once they got into power. No change to police tactics, protesting or our unfair extradition treaty with the USA but we did get a stop to being clamped on private land instead of the mny great ideas in the original.

So ANY support to keep this site running would be much appreciated! I don't have much money after leaving my job and it is a choice between shutting the server or selling the domain or paying a lot of money just so I can show this material.

Material like the FSB Bombings that put Putin in power or the Google no 1 spot when you search for protecting yourself from UK Police with "how to give a no comment interview". If you see any adverts that interest you then please visit them as it helps me without you even needing to give me any money. A few clicks per visit is all it takes to help keep the servers running and tag any tweets with alternative news from the mainstream with the #altnews hashtag I created to keep it alive!

However if you don't want to use the very obvious and cost free ways (to you) to help the site and keep me writing for it then please consider making a small donation. Especially if you have a few quid sitting in your PayPal account doing nothing useful. Why not do a monthly subscription for less money instead. Will you really notice £5 a month?


0 Responses

Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.



Some HTML is OK

or, reply to this post via trackback.



css.php