Conspiracy theorists are having a field day with the question of what might happen to Greece's membership of the euro should its financial woes continue...More at the link.
The honest answer is that no one knows what would happen if a country tried to pull out of the single currency because it hasn't happened before... EU sources point out that the financial crisis could have been much worse without the single currency, with competitive devaluations rippling throughout the continent by now...
But if Greece decided to devalue, it would need to do more than simply start printing new drachmas and walk away from its sovereign debt. It would also need to do something about the euro-denominated debt of its own citizens and companies. Larger companies and banks might choose to default too, but as Dubai found, this cure can be worse than the disease...
17 February 2010
Could Greece pull out of the euro?
An interesting article in a business blog at The Guardian yesterday. Here are some excerpts: