pocketscience
Well-Known Member
Mad. If the greeks just ran off euros willy-nilly surly some intervention from outside would be needed before it brings down the worlds financial system.
I'm seeing Luftwaffe bombs dropping on the greek mint
Greek elections
- Thread starter ska invita
- Start date
I'm seeing Luftwaffe bombs dropping on the greek mint
ska invita
back on the other side
Its going to be a good week for photographers in general to catch some choice body languageIt'd be extremely amusing to see their faces if Lapavitsas was named to replace Varoufakis
Bring forth the Lapavitsas!
Syriza have done the good cop routine - nothing to lose by sending in someone a bit badder now. Necessary even
ska invita
back on the other side
51 billion according to this http://www.businessinsider.com/ecb-allows-ireland-to-counterfeit-51-billion-euros-2011-1?IR=T
but it did have ECB approval.... but still.... 51 billion could really help right now!!
ska invita
back on the other side
well it depends how much you have to print before it sends the wider economy that much off kilter - if the irish were allowed to print all those billions I cant see what harm another 50billion would do
pocketscience
Well-Known Member
From what I understand of the article the difference was that the ecb weren't in a standoff situation (capping funds) with the irish at the time. So I guess it was more of a bi-lateral decision with some knowledge from the ecb as to the capacity they could print before forex markets were put at risk.well it depends how much you have to print before it sends the wider economy that much off kilter - if the irish were allowed to print all those billions I cant see what harm another 50billion would do
It sounds mad to me that the greeks could to it now without any ecb oversight.
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ska invita
back on the other side
Last week there were threats from Syriza that Greece would fight for its legal right to remain within the eurozone - "The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable." ... perhaps there's a potential for greece to go independent within the union, bypassing the EuroCentralBank, and printing greek euros rather than drachmas!? Seems very unlikely but fun to think about
happie chappie
Well-Known Member
I can’t see how a scrip currency could work. It would have to be printed and distributed - no easy task. It would also have to be printed to the same security standards as the Euro to prevent forgery.
When it was issued there would have to be some sort of conversion rate set between what is essentially an IOU and the Euro - good luck with that.
Then when enough Drachmas had been printed the same process would have to happen again.
People would have to have confidence in the scrip currency - that’s certainly not guaranteed. Indeed, if I was a shopkeeper and I was offered a Euro or some form of IOU I would always opt for the Euro.
While the rich will always have access to Euros, the poor would more than likely have to rely on scrip when their Euros ran out. This would mean they would be at the back of the queue when buying goods and services.
In such circumstances a scrip currency would be a recipe for economic, political and social disaster. There would be the real risk of a breakdown of civil society if large sections of the population were unable to buy basic foodstuffs.
The Euro is an internationally tradeable currency. The scrip would be practically worthless outside Greece, even if it had any value inside the country, which is highly debatable. It would be practically impossible for Greece to import anything of value.
There seems little point in issuing a scrip currency. The Greeks might as well move to the Drachma directly.
One way out of the problem is for the ECB to continue emergency funding of the Greek banks to ensure liquidity while capital controls remain in force. The economy would continue to run on the Euro, for the time being at least.
In the meantime, every EU country (as well as the US and Canada etc) agrees to print as many Drachmas as fast as they can so Greece could revert to its original currency as soon as possible, or at least have the capacity to do so.
Bernie Gunther
Fundamentalist Druid
Paul Mason's view of Varoufakis' replacement.
http://blogs.channel4.com/paul-mason-blog/syrizas-reshuffle-step-nonerratic-marxist/3613
http://blogs.channel4.com/paul-mason-blog/syrizas-reshuffle-step-nonerratic-marxist/3613
hot air baboon
Well-Known Member
Analysis - Czechoslovakia: a currency split that worked
http://uk.reuters.com/article/2011/12/08/uk-eurozone-lessons-czechoslovakia-idUKTRE7B717G20111208
The split was announced on February 2. The two countries already had capital controls, but all cross-border money transfers between them were halted to avoid further speculative flows into the Czech Republic. Border controls were tightened.
Komercni Banka, a then state-owned commercial bank, glued stamps, printed by a British firm to ensure secrecy, on 150 million federal banknotes. These were trucked around the country with the help of police and the army.
The exchange for notes stamped by Czech or Slovak stamps, at a 1:1 rate, started on February 8 and was completed in four days. Later in 1993, the stamped notes were replaced by new ones.
People could swap a maximum of 4,000 crowns -- then worth $136 (87 pounds) -- in cash. They had to deposit the rest. The old money ceased to be valid immediately the switch started.
Capital controls were essential to stop bank runs. Secrecy in the buildup was paramount.
"Distrust in the monetary setup, devaluation speculation by importers, exporters and banks led to a quick depletion of foreign reserves in the Czech Republic and Slovakia," wrote Pavel Kysilka, who led the Czech separation team.
This was made worse by money flows from Slovakia into the Czech Republic. Slovakia had a hard time at first but ultimately became a poster child for reform and qualified for the euro before its neighbour.
After contracting 3.7 percent in 1993, Slovakia's economy grew in 1994. Trade between Slovakia and the Czech Republic recovered after a 25 percent drop in 1993 and trade with the European Union grew. The Slovak currency devalued by 10 percent in mid-1993 and remained weaker than the Czech crown until Slovakia's euro entry in 2009.
http://uk.reuters.com/article/2011/12/08/uk-eurozone-lessons-czechoslovakia-idUKTRE7B717G20111208
The split was announced on February 2. The two countries already had capital controls, but all cross-border money transfers between them were halted to avoid further speculative flows into the Czech Republic. Border controls were tightened.
Komercni Banka, a then state-owned commercial bank, glued stamps, printed by a British firm to ensure secrecy, on 150 million federal banknotes. These were trucked around the country with the help of police and the army.
The exchange for notes stamped by Czech or Slovak stamps, at a 1:1 rate, started on February 8 and was completed in four days. Later in 1993, the stamped notes were replaced by new ones.
People could swap a maximum of 4,000 crowns -- then worth $136 (87 pounds) -- in cash. They had to deposit the rest. The old money ceased to be valid immediately the switch started.
Capital controls were essential to stop bank runs. Secrecy in the buildup was paramount.
"Distrust in the monetary setup, devaluation speculation by importers, exporters and banks led to a quick depletion of foreign reserves in the Czech Republic and Slovakia," wrote Pavel Kysilka, who led the Czech separation team.
This was made worse by money flows from Slovakia into the Czech Republic. Slovakia had a hard time at first but ultimately became a poster child for reform and qualified for the euro before its neighbour.
After contracting 3.7 percent in 1993, Slovakia's economy grew in 1994. Trade between Slovakia and the Czech Republic recovered after a 25 percent drop in 1993 and trade with the European Union grew. The Slovak currency devalued by 10 percent in mid-1993 and remained weaker than the Czech crown until Slovakia's euro entry in 2009.
8den
No I'm pretty sure that was 8ball...
J Ed
Follow Back Pro Expropriation
Doesn't sound great tbh
brogdale
Coming to terms with late onset Anarchism
I suspect it was none of those qualities or attributes that contributed to his removal, rather his inability to see the emperor's new clothing.
happie chappie
Well-Known Member
One of the key differences in the above case is that the existing currency ceased to have any value once the switch took place.
This would not be the case with the introduction of a Scrip. [ETA - should have read Scrip rather than Drachma as in orginal. Sorry].
The existing currency, in this case the Euro, would still have value.
Arguably the Euro would have, and will continue to have, far greater value than the currency replacing it.
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Bernie Gunther
Fundamentalist Druid
Here's something he co-wrote about the issues facing the various elements of the Greek left during this crisis.
http://www.workersliberty.org/system/files/milios.pdf
butchersapron
Bring back hanging
Non pdf here. Should probably note that is from 2012 and a lot of distance been covered since.
(Milios wrote a really good piece recently, but it really isn't the basis for Syriza's approach at all).
pocketscience
Well-Known Member
Time now for Merkel to sideline Schäuble. While she's at it, also tell Lagarde to stay out of further negotiations (the IMF can dance at another table for their owed money).
No the scrip would be 1 scrip = 1euro, not a floating rate. The state of California did just this in 2008.
Ska Invicta made a good point earlier bout ideology, left party gaining a foothold in EU etc.
Also will be interesting to see ideological hold of `neo-liberalism` on EU member states/EU commission/ECB...will they have a bankrupt, even-more-fucked Greece still inside EU (surely generating net costs to other 27 member states) or will they be forced to back down?
Also, BBC saying `markets down` etc. The FTSE as i write is down 1pc, Nikkei was down what? 2pc? Not huge moves. Euro has strengthened vs sterling, BBC says it has fallen...
Even if Greece exited euro `markets` would lend it money. Some fund/bank would still take a punt, might even see returns as better now other debts wiped out...
Economic journalism is really shit a lot of the time.
Also will be interesting to see ideological hold of `neo-liberalism` on EU member states/EU commission/ECB...will they have a bankrupt, even-more-fucked Greece still inside EU (surely generating net costs to other 27 member states) or will they be forced to back down?
Also, BBC saying `markets down` etc. The FTSE as i write is down 1pc, Nikkei was down what? 2pc? Not huge moves. Euro has strengthened vs sterling, BBC says it has fallen...
Even if Greece exited euro `markets` would lend it money. Some fund/bank would still take a punt, might even see returns as better now other debts wiped out...
Economic journalism is really shit a lot of the time.
butchersapron
Bring back hanging
They issued IOUs redeemable in dollars 3 months later. Not quite the same.
No not quite same - timeframe more succinct - but scrips (there are others...Czech republic??Slovaks when split occurred iirc) have precedent. Not a floating rate currency.
It's not like writing it in biro on a post-it...i have loads of them anyone here can buy, PM me send cash
ETA - how badly has Merkel misjudged this all along from 2010. And Hollande, the fucking waste of space prick...jesus christ he's like buffoon number 1.
It's not like writing it in biro on a post-it...i have loads of them anyone here can buy, PM me send cash
ETA - how badly has Merkel misjudged this all along from 2010. And Hollande, the fucking waste of space prick...jesus christ he's like buffoon number 1.
ska invita
back on the other side
Has a replacement for Yanis been announced? The Paul Mason piece linked to was from April....
I think the UK has had about 40bn quantiative easing too, so, you know, we're all in it together
happie chappie
Well-Known Member
Sorry - I’m not sure I follow. What did California do in 2008?
In any case I’m not sure the Greek population (or anyone else for that matter) would accept replacing an internationally traded hard currency with potentially worthless funny-money on a 1:1 basis. I certainly wouldn't.
For a whole host of reasons I can’t see how this would work.
In such circumstances, pretty much everyone who could would continue using the Euro no matter what the Greek Government says or does.
butchersapron
Bring back hanging
In the great depression they were often written on clamshells, bits of wood, old car tires etcNo not quite same - timeframe more succinct - but scrips (there are others...Czech republic??Slovaks when split occurred iirc) have precedent. Not a floating rate currency.
It's not like writing it in biro on a post-it...i have loads of them anyone here can buy, PM me send cash
ETA - how badly has Merkel misjudged this all along from 2010. And Hollande, the fucking waste of space prick...jesus christ he's like buffoon number 1.
ska invita
back on the other side
though reporting the yes vote as bigger than it was would only have the effect of encouraging out the no vote, no? Theres nothing to be gained by manipulating the No vote down, is there?
Blagsta
Minimum cage, maximum cage
That article is from April. Is there a replacement yet?
SpookyFrank
A cheap source of teeth for aquarium gravel
Different kettle of fish with the euro though, as it will continue to have value even after a split. They can't just invalidate it and start over, unless they were to invalidate it everywhere and replace every banknote in the eurozone, at a cost far greater than simply buying Greece a new Greece.
