What about Puerto Rico? Apparently, them leaving the dollar has been ruled out, but reintroducing the peso would allow their economy to realign with the US. The problem is that a separate currency is no panacea especially if you don't export anything (like Greece and Puerto Rico) and you are integrated into/dependent on a larger economic block. The arguments for the Greeks to introduce the drachma are the same for the Scots to have the merk when they become independent, but this isn't discussed much because the short (and probably medium) term consequences are pretty negative, economically and politically.
Since the figures were fudged politically to allow Greece to join the euro, the Greeks might feel that EU is obligated to try and keep them going if they want the euro with austerity. But the EU is a Christian Democrat/neoliberal club now and there's not much sympathy for a far left government in Athens playing silly buggers. There's always going to be a clash between democracy, the bond markets and making sure the supermarket shelves and cash machines are kept full. Look at Britain and the IMF in 1976 or, indeed, the various other devaluation crisis (1947, 1967 and 1992 - so not just Labour).
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timeasmymeasure
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Date: 2015-06-30 06:01 pm (UTC)Since the figures were fudged politically to allow Greece to join the euro, the Greeks might feel that EU is obligated to try and keep them going if they want the euro with austerity. But the EU is a Christian Democrat/neoliberal club now and there's not much sympathy for a far left government in Athens playing silly buggers. There's always going to be a clash between democracy, the bond markets and making sure the supermarket shelves and cash machines are kept full. Look at Britain and the IMF in 1976 or, indeed, the various other devaluation crisis (1947, 1967 and 1992 - so not just Labour).