Registered: Sep 2008
05-30-12 11:06 AM
Quote from trefoil:
They'll wind up restarting their own currencies. It's the only sensible thing to do.
The "core", so called, might stay in, purely for the prestige factor. After a few years, more for some, less for others, they'll be forced to drop out in favor of the strongest one in the union. Between them, Finland is probably the weakest and would be out first. Among the remainder, they'd drop one by one until it was only the Germans and the Dutch. It'd be a tough fight between them, the former having the weight of numbers on its side, the latter the advantage of being small and therefore swifter. It'd be interesting, but of no significance to the global economy or even the future of the EU.
It is more complicated than that. All the debt that exists is in euro's so all the mortgages and other debt is paid back in euro's. If the debt was transfered to another currency then depreciated to pay it back the result is the same default.
What they are more likely to do it to introduce the old currency back in tangent with the euro. The old currency would be used to trade and then they will keep the existing debts in euro's so that they do not collapse the contract. This may work because it would make the deprecation needed to attract business in the countries and enable trade from outside the eurozone. But it will not have to default on the debt contracts that exist in the euro.
Also you are forgetting the success of the stronger states in the Euro is dependent on the weaker states in the Euro. Read this article I wrote it explains it.