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Actually, as I understand it, "euro membership is irrevocable" as long as the nation in question remains an EU member. So to leave the euro Greece would have to withdraw from the EU.

Also, while a nation can withdraw, the EU treaties make no provision for the expulsion of a member nation.

(http://en.wikipedia.org/wiki/Withdrawal_from_the_European_Union - since I'm not on my own machine right now I can't quote using Tribext.)

A Grexit ain't gonna happen. At least not within a timeframe that has any immediate relevance.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Tue Jan 6th, 2015 at 08:29:44 AM EST
[ Parent ]
Although Migeru pointed out that the current treaties do not prevent a country from having another currency as well.

Greece could state that they accept Drachmas, which they would use to pay salaries, and not contravene to the obligation of using the euro.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Tue Jan 6th, 2015 at 08:48:48 AM EST
[ Parent ]
Actually, according to this, that's not the case:

http://ec.europa.eu/economy_finance/euro/cash/legal_tender/index_en.htm

Within the euro area, only the euro has the status of legal tender. This results from the fact that the money used in a monetary system does only have the status of legal tender if it is provided for under the respective monetary law.

Theoretically, I suppose, Greece could issue some kind of scrip à la Wöhrl:

Yet, contractual parties are free to agree to use in transactions other official foreign currencies with legal tender status in the state of issuance, e.g. the Pound Sterling or the US Dollar. The same applies to privately issued money like local exchange trading systems (e.g. voucher-based payment systems in certain communities) or virtual currency schemes (e.g. Bitcoin). Although these are not official currencies and have no legal tender status, parties can agree to use them as private money and without prejudice to the official currency (euro or national currency) being the sole legal tender.

However, it would seem to me that it would be difficult to decouple the value of the scrip from the euro.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Tue Jan 6th, 2015 at 09:18:09 AM EST
[ Parent ]
it would seem to me that it would be difficult to decouple the value of the scrip from the euro.

It seems to me that, what governments cannot/willnot do by fiat 'the market', (esp. blackmarket), can do routinely and with ease.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jan 6th, 2015 at 09:58:12 AM EST
[ Parent ]
Probably. But in this case I would assume that the government would actually want its scrip to devalue against the euro.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt št gmail dotcom) on Tue Jan 6th, 2015 at 10:11:25 AM EST
[ Parent ]
And it would likely get it, absent some extraordinary intervention by the ECB.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jan 7th, 2015 at 12:43:32 AM EST
[ Parent ]
Within the euro area, only the euro has the status of legal tender. This results from the fact that the money used in a monetary system does only have the status of legal tender if it is provided for under the respective monetary law.

"Legal tender," however, can mean at least three different things:

  1. Legal tender for the settlement of all debts. In the minimalist reading this means that a debtor can void his debts by presenting the coin of the realm, in preference to whatever other currency or payment in kind is specified in the contract. In the maximalist reading, the debtor can do this with prejudice to all other obligations to settle in particular currencies, and the creditor can demand the coin of the realm in settlement in preference to other currencies. (Which would actually make for an interesting ECJ challenge to the requirements in various "trade" treaties that expropriations must be compensated in the currency of the former owner's choice, on the basis that this prejudices the status of the Euro as sole legal tender of the Eurozone.)

  2. Legal tender for the settlement of taxes. In the minimalist reading this means that you can always settle your debts to the tax man with the coin of the realm: The tax man cannot demand payment in kind if you are able to pay in the coin of the realm. In the maximalist reading, the coin of the realm is the only valid means by which to settle taxes.

  3. Legal tender for the settlement of purchases. In the minimalist reading this means that merchants must offer their wares at prices denominated in the coin of the realm, and must transact if those prices are met by a customer solvent in the coin of the realm. In the maximalist reading merchants may only transact in the coin of the realm.

Greece could argue for an interpretation of legal tender as the minimalist reading of all three prongs, which would enable it to operate a dual currency system. This reading would actually seem to be supported by the EC document you link to.

In principle, maintaining a dual currency system is a major inconvenience. In practice, Gresham's Postulate will usually suffice to keep the hard currency out of general circulation. And even if it does not, operating a dual currency system is a considerably smaller inconvenience than regular major industrial depressions, which is the result of the current mismanagement of the eurosystem.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jan 6th, 2015 at 12:19:10 PM EST
[ Parent ]
Greece could fail to live up their obligations under the treaties regarding the euro.

A country that fails its obligations can be sued in Court by the Commission and get to pay a fine. Happens all the time and have never resulted in country leaving the EU or being expulsed.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Jan 6th, 2015 at 09:42:43 AM EST
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There are actually obligations on both sides. The troika has reneged on some of its agreed to obligations.
by Upstate NY on Wed Jan 7th, 2015 at 10:58:25 AM EST
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Yes, thanks for pointing out in another thread that Greece has already been promised a debt rescheduling.

So if Greece starts using something else, Greece fails its obligations.

After the Troika (which includes the commission and the ECB) failed on their promises for restructuring the debt.

After the ECB, the Commission and the Eurogroup totally ignored that the social protocol talked about social protection and not about destroying it.

After the ECB used a 3% deficit rule that the Italian minister at the time claims were non-binding to bludgeon member states with trade deficits into giving up powers that never belonged to the Troika.

All in all, there are a number of vioaltions and if Greece defends itself with vigor a case before the Court can be interesting.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Jan 7th, 2015 at 04:10:22 PM EST
[ Parent ]
Greece could balance its budget with the ticket sales and broadcast rights.
by rifek on Wed Jan 28th, 2015 at 12:29:31 PM EST
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