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  Birth of new Greek drachma would be pained, rushed
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Last EditedScottĀ³  May 20, 2012 07:29am
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AuthorPeter Apps
MediaNews Service - Reuters
News DateSunday, May 20, 2012 01:00:00 PM UTC0:0
Description"If or when policymakers finally decide Greece should leave the euro, the exit could happen so quickly that "new drachma" currency notes might not be printed in time.

In principle, some of the long-term consequences of Athens leaving the currency bloc are not unappealing. The euro zone would no longer have to worry about what has always been its weakest link. While a new Greek currency would almost certainly immediately crash in value as soon as it was issued, in doing so it would make the Greek economy much more competitive.

But the short-term effects would be brutal, both domestically and on the global economy. A post-euro Greece could find itself struggling to import food and fuel, with everyday life reduced to barter in goods and services and the government unable to pay workers in anything they would want to receive.

"It would be chaos," says Marios Efthymiopoulos, a visiting scholar at Johns Hopkins University Centre for Advanced International Studies and president of Thessaloniki-based think tank Global Strategy.

"The banks would collapse and you would have to nationalise them. You wouldn't be able to pay anyone except in coupons. There is only one (currency) printing press in Greece. It is in the museum in Athens and it doesn't work any more."

The cost of managing what is increasingly being termed "Grexit" - with its resulting global market turmoil and colossal financial pressure on Spain and Italy - could dwarf the cost of keeping Greece on financial life support. But with northern European states - and their electorates - becoming tired of bailouts, the probability is seen clearly on the rise."
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