Not just Poland. Hungry did the same thing. Debts were denominated in CHF, EUR but paid for in Forint.
Well, let's say I define four possible scenarios for the EUR (specific numbers given are sorta random estimates): 1) The EMU works out its issues and keeps "muddling on". Let's say this implies EURUSD arnd here, i.e. 1.43 2) The stronger members of the EMU exit and go back to their national ccies (Deutschemark, Franc, etc). The PIIGS keep the EUR. This would imply EURUSD of arnd 0.8 3) The weaker members of the EMU exit and go back to their national ccies (Lira, Drachma, Peseta, etc). The AAA EMU members keep the EUR. That implies EURUSD at smth like 2.5 4) The EMU breaks up and the EUR ceases to exist entirely. That implies EURUSD at 0. If you assign some reasonable (but arbitrary) probabilities to the above outcomes (say, 55%, 20%, 20% and 5%, respectively), you get an "expected value" for EURUSD somewhere arnd here.
I don't agree that an exit of the weak members imply a higher EUR, never mind a 2.5 rate. In 2007 when the EU was 'working' and yields on PIGS debts were low the rate wasn't nowhere near those levels. Back then almost nobody knew what was about to happen and all the flaws of the system yet the EUR wasn't the new CHF. All the selling by the weak members should send the EUR lower in my view
Ok. Any scenario besides #1 would work for me 45% chances? I think that's very optimistic. My next question is: when? One of my coworkers says the euro is going to 1.80, the main problem is he keeps saying that since 2007. Eventually someday it could go but that would not mean he was right.