A Hypothetical Question- If a European nation were to pull out of the EMU system (The Euro) what would be the likely outcome for it's Euro denominated debts? I'm specifically thinking about Germany. If, in the unlikely event, Germany were to withdraw from EMU, i would assume that it's new currency (New Deutch Marks?) would appreciate significantly against the Euro and probably to other currencies, such as the US$. What would be the effect on it's Euro denominated debt? If it were to devalue the debt, would this be considered a default? An act of war? Or would Germany transfer the Euro debt to New Deutch mark debt at an equal value to keep foreign investors whole? Thoughts?