On Nov 29, 2011, at 3:30 PM, James Heartfield wrote:
> But there is also a lot of meaningless speculation about the disintegration of the Euro as a currency, which is simply unjustified. The Euro will no more ‘fail’ that the dollar will ‘fail’. There is no way that the Eurozone participants could return to their national currencies, which just don’t exist anymore. The idea that the Greeks would return to the Drachma was bizarre. How would it make sense to try to found a new currency precisely at the point that your economy was screwed? What would you back the currency with? And why would Greece’s debtors think that was a good idea?
Greece dropping the euro would be really messy, including for Greeks, but it's hardly impossible. It's a sovereign country and it's not really up to its creditors whether it defaults. Default has been very common throughout history - the U.S. was practically founded on it. Germany might be happy to offload the southerners and just stick with a core of mini-Teutons and maybe France.
Yanis Varoufakis says that if Greece means to exit the euro, it should default on its euro bonds and then introduce the drachma.
Doug