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How can the threat of leaving the Euro be pointless, if the alternative is to actually leave the Euro?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Dec 1st, 2014 at 05:31:57 AM EST
A fair question. For the shake of the discussion we will have to divide this up into discussing France and SPG (Spain-Portugal-Greece).

I would consider my point IV (collapsing banks in a country which threatens to leave), the most important point which distinguish these two options.

France:
As Cyrille has pointed out, it is not quite clear how to leave the Euro with out discussing it first and for France the Banks did not collapse when Sarkozy hinted that France could leave the Euro. But that is France, and I guess that many people simply agree with my point III (The French fundamental are sound).

SPG:
Maybe you know better, but I feel that here my point IV is fully applicable. this obviously leaves the problem of how to organize a withdrawal form the Euro.

That is why I also added the 'other options part'. Issuing an additional currency could be the best option for SPG.

by rz on Mon Dec 1st, 2014 at 06:31:38 AM EST
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Would the markets be spooked by the introduction of a parallel currency? It actually improves the fiscal sustainability of the country that does it.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Dec 1st, 2014 at 08:53:54 AM EST
[ Parent ]
It would also improve the country's ability to flat up default on primary currency debts which it might consider odious.

So I'm guessing "yeah."

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 3rd, 2014 at 04:22:30 PM EST
[ Parent ]
I think it depends a bit on the details of how the additional currency is implemented. The government pays its employees with new currency, and the currency starts to circulate. This means also a large part of the tax income will be in the new currency. Depending on how this goes, it could be that it becomes impossible to service the debt.
by rz on Thu Dec 4th, 2014 at 03:22:30 AM EST
[ Parent ]
Yes, It is always dependant on the implementation. Considering the political reality right now, It seems like the best option there is, is tax credit program. All these political parties in Italy and even in spain and France are so fragmented. there are people in  those movements with their own agenda.So you can get members there whos views completely differ regarding euro and EU.Also there are a lot of opportunists riding this wave.  It seems the problem in Europe is that there is not strong left against this neoliberal utopia. The left we have are intellectuals who live in nice houses and they don't really feel the pain austerity or euro for that matter has caused. My view right now is that no matter how many eurosceptics get into any of the governments, the ultimatums will not be given and this nightmare could go on for years. That is why I consider alternative currency to be the best option. It should fly politically too bacause the idea is so simple really: we don't have to have euros to spend and we can give the economy a tax break. Tax credits (quuasi monet) is just a tool though, It depends on what you do with It. Full employment can be quickly achieved, also It is way easier to leave euro once you have implemented tax credits that trade agains euros and are liquid financial assets that government can issue at will. Political situation might change of course but right now I don't see most of the eurosceptics being much more than opportunists regarding euro, national sovereignity etc. Or if some are, those are the kind of radicals that I wish were in no government in Europe.
by Kristjan on Thu Dec 4th, 2014 at 04:25:38 AM EST
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The Press Project: Update: Syriza bashing memo was fake (28 November 2014)
Athanasios Vamvakidis, a Bank of America executive who was sitting in the London meeting, said in a radio interview on Vima FM Friday that "what the memo states was simply not presented in our meeting with Syriza", adding that the Capital Fund executive who allegedly wrote it was not present in said meeting.


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Dec 1st, 2014 at 09:11:37 AM EST
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