Thread: Deutsche Bank floats parallel Greek Euro

Germany's financial giant Deutsche Bank has floated the idea of a "geuro" - a parallel currency allowing Greece to devaluate while staying in the eurozone if an anti-bail-out government takes over in Athens. If left-wing radicals win the 17 June elections in Greece and stick to their promise of scrapping the €130 billion bail-out and its austerity requirements, Greece could still stay in the eurozone without financial aid if it introduced a parallel currency, says a Deutsche Bank study published on Monday (21 May).

EUobserver.com / Economic Affairs / German bank tables plan for parallel Greek euro

Not really sure how this is different from the Drachma. Anyone else get it?

Originally Posted by Ben K.

EUobserver.com / Economic Affairs / German bank tables plan for parallel Greek euroNot really sure how this is different from the Drachma. Anyone else get it?

Nobody else would join Greece in the Drachma. If you separate the Euro into two strands (Northern European Euro comprising Germany / Holland etc) and a Southern Euro for the risk states (Spain / Portugal / Greece / Ireland) they can have a Euro Lite which they can devalue and recover. The not quite parallel Euro makes a lot of sense and I think I stated in a separate thread that this could be the saving of both the EU and the Euro as you'd have the best chance of going back to what the EU should have been i.e. a small grouping of powerful and successful nations with satellite countries obliged (properly) to meet fully scrutinised requirements to join.

Originally Posted by Ben K.

EUobserver.com / Economic Affairs / German bank tables plan for parallel Greek euro

Not really sure how this is different from the Drachma. Anyone else get it?

For one, they wont have to redo their whole monetary system and just keep using the Euros they got. On the flip side, the Euro would go up in price.. which wont be good for Europe...

People seem to forget that changing currency is very very expensive and time consuming.... it took 3 years from the approval of the Euro till we had it in our hands... and people some how expect that Greece will switch over night? talk about living in a fantasy world.

It's no different. Don't think the other 'problem' nations (everybody?) would be very willing to share a currency with Greece again.

It's not realistic to assume that other members are willing to help Greece AND give them the opportunity to further impoverish their people, mainly because of their structural malspending and corruption. In terms of euro stability I'd rather help Spain with its unemployment. We need spending that creates wealth.

Originally Posted by Djoop

It's no different. Don't think the other 'problem' nations (everybody?) would be very willing to share a currency with Greece again.

It's not realistic to assume that other members are willing to help Greece AND give them the opportunity to further impoverish their people, mainly because of their structural malspending and corruption. In terms of euro stability I'd rather help Spain with its unemployment. We need spending that creates wealth.

I actually agree some what. Greece needs help but so far it seems everyone in Greece is in denial, both the elites who in large part caused the crisis, but also the masses who blame everyone but themselves for the problems. Greece has a corruption problem and needs to tackle this big time. Question is if they can tackle this under these economic circumstances or if it is not just another breeding ground for right wing fanatics. I fear the latter.. sadly.

Like everyone else, I really think you'd have to blackmail those countries to enter a smaller currency union with Greece, IC.

Originally Posted by Ben K.

Like everyone else, I really think you'd have to blackmail those countries to enter a smaller currency union with Greece, IC.

Could be blackmail but it could equally be for countries that seek to devalue and realise they can't within the current structure of the euro. I personally think a 2-tier euro would work but I don't make the decisions.
This, like the rest of the posts could be academic anyway as tonight there's been reports tonight on BBC 24 that EU commissioners have asked all governments to prepare contingency plans in case of Greek exit.

This is complete

Why don't they just say: have your drahma but we will print it for you. No need for this circus.