Re: Re: Why did Ireland bother? Don’t they have Trojan horses?


@rt21 wrote:

Just read an interesting article in the Independent about the euro crisis. One of the questions they ask is

Q: So why don’t the Greeks, the Irish and others just leave the euro now?

A: It is not a painless solution. If they adopt a “new drachma” or “new punt” their overseas debts, many denominated in euros, will automatically be revalued upwards, making them even more difficult to pay off. People’s savings would be devalued and devastated. In those circumstances a national default would become a reality in Europe, something hitherto confined to Africa, Latin America and Russia. It would be humiliating, make borrowing very expensive, and might be even worse than defaulting within the euro.

Haven’t really got time to comment on the article but I do share their view that leaving the euro could be just as painful if not more than staying in


This isnt a problem. The debt can be converted or defaulted upon. A conversion will result in a “hair cut” but investors are already pricing in the effects of that.

So, not really valid, as it assumes that a default or haircut wont take place if they stay in the Euro. Merkel has made it clear that haircuts will happen.