March 24, 2010 at 2:52 pm #55500
Greece has been buzzing the last few days with a rumour that in order to solve the current crisis, there could be a new type of Euro for the country – like a Euro-drachma. This would mean Greece could devalue the currency in accordance with economic needs and once things improve it could be later pegged to the Euro.
Many here have been panicking that this arrangement could be agreed at the two-day EU Summit. A banking friend has told me people are withdrawing money to buy land/property or sending it to an overseas account. There has definitely been a ‘run’ on deposits in the banks, especially the ‘big’ money of the wealthy.
A friend involved in selling properties on Crete said there has been a spate of ‘strange’ phone calls from Greeks in Athens during the last couple of weeks making offers on properties, despite never having seen them (or even knowing exactly where they are!). “I have 150,000 euros, I want to buy that house…” kind of thing.
So what are the chances that there could be a two-tier Euro – with the Club Med countries have a Euro-Peseta, Euro-lira, Euro-drachma etc? There is a Bank Holiday in Greece tomorrow, banks will be closed – and if an announcement from the EU Summit like this is made, the Government could simply close the banks Friday (or longer) and instruct them to re-label all deposits and loans as Euro-drachmas.
Are the Greeks panicking unnecessarily or could this become a reality?
Have just seen this article on the CNN website:
March 24, 2010 at 3:58 pm #97648
won’t happen. All of this is just melodrama for the media.
It would be far more costly both politically and financially for a country to pull out of the euro.
either of 2 scenarios are going to happen
1. greece shows it can be grown up and the EU lends a hand
2. IMF comes in and greece has to be a grown up.
in my opinion anyway
March 25, 2010 at 11:46 am #97657
This will not happen and certainly not overnight, as you said it’s a rumour. For this to happen it would need a new EU treaty and we all know how problem free they are! Also there is extreme pressure from the Germans to not even have the Greek crisis on the summit agenda.
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