[gizmo]

They can't. Not without support. It takes at least a year to create a new currency. They don't even have a functioning central bank. All businesses would have to adopt the new currency, all ATM machines, all government institutions. It's a huge project.

Besides, without trust in the new currency it won't be worth anything. That trust has to come from the backing of a foreign institution.

[mseebach]

> It takes at least a year to create a new currency

A new full blown currency, yes. A new temporary currency can be done in days, or weeks at most - East Germany did it. Slovakia did it. The process involves your current currency and a stamp.

For businesses and institutions, it's much easier, everything is electronic anyway. Your bank accounts just switch over from EUR to XGD.

> it won't be worth anything

That's pretty much the point. Exports and tourism will be boosted and the debt will be re-denominated in the new currency (at a fraction of its EUR value) or outright defaulted on.

[gizmo]

A new currency would be worth much less than the Euro. That's a good thing. But it would still need to be more or less stable. I'm skeptical that an emergency currency would hold its value, because of capital flight.

My "at least a year" claim is based on this:

http://www.theguardian.com/commentisfree/2015/jul/10/germany...

[mseebach]

Yes, the currency would take a while to stabilise, but it's not like Greece is a model of stability as it is. The argument for, is that the stabilisation following a massive devaluation, will happen sooner than whatever the endgame to the current circus is, will.

> My "at least a year" claim is based on this:

Now, why would a politician exaggerate how painful a solution he doesn't like is? Does he really think that post-grexit Greece and Iraq in 2003 are completely comparable in terms of security and infrastructure? Does he know that Iraq's economy was almost entirely cash-based whereas Greece's is based on a fairly modern banking system?

I base my claim on actual history that actually happened: http://uk.reuters.com/article/2011/12/08/uk-eurozone-lessons...

If I put on my conspiracy cap, I wouldn't be surprised if a helpful soul decided to discreetly have a transition-currency printed up, ready-packed on pallets in a basement somewhere in Frankfurt.

[gizmo]

I agree that a massive devaluation followed by a stable-ish currency is preferable to the current circus.

I also agree that your skepticism is justified. However, you're mistaken that Varoufakis wrote that because he doesn't want an exit. In fact he's been arguing that Greece should have started preparations for a new currency years ago. Varoufakis even got fired because Tsipras wasn't willing to gamble with a possible grexit. Of course it's possible that Syriza did make preparations for the new Drachma and all claims to the contrary are just misdirection. I don't believe that, though.

[bboreham]

The capital that can fly, has flown.

[VLM]

"That trust has to come from the backing of a foreign institution."

Central Bank of Russia. That's its self descriptive name.

Now that I've pointed out there are more than binary alternatives WRT euro or drachma, I'm not about to start claiming this 3rd alternative is the only other possible alternative. But it sure is a good idea!

From the Greek perspective they're "all equal under the law" in theory but in practice they're gonna be debt slaves until they finally break completely free. There are alternative short term plans but NO alternative long term plans. Better sooner than later. What I mean is something like revolution now and be back to normal in 2020, or five years of grinding poverty (if they're lucky enough to have it that good) followed by revolution in 2020 and back to normal in 2025. The Russians are big enough to take care of greek issues, are somewhat more financially competent than the greeks, and are reasonably nearby.

From the Russian perspective this would be a "cheap" way to gain a friendly client state in Europe. Aid business is corrupt as heck so some fraction of the "aid" would just get recycled into Russian arms industries, like every other foreign aid package. Russia has natgas and resources in general. Greece has ports and Russia always likes ports... Greece has land that would hold a Russian military base or airfield or naval base.

[louithethrid]

They also dont have a working land registry office despite having recived 150 million euros to build one.

[hectormalot]

And that is exactly why the other eurozone countries had so much leverage in the negotiations. I suppose Tsipras could have foreseen this from a negotiation point of view.

As a Dutch citizen, I'm not particularly proud of the way my government (and Germany, etc.) handled this. Silver lining is that it includes a 12.5b investment in the Greek economy, if invested well will boost economic recovery.

I ask myself, would Greece be able to improve government spending and reduce corruption without this pain?

[gizmo]

> I suppose Tsipras could have foreseen this from a negotiation point of view.

I think Tsipras was naive: he probably hoped Germany would be lenient because the alternative was so unthinkable.

In theory it's great to force a country to make productive reforms that politicians would otherwise refuse. In practice, the reforms demanded here are largely punitive and pointless.

The focus on corruption is a cheap way to claim to moral high ground, and to justify antidemocratic "parental oversight". If Greece allowed the equivalent of A Dutch Sandwich tax arrangement it would be called fraud and corruption. But when the Dutch do this it's somehow OK. Clamping down on corruption in Greece would certainly be a good thing, but the hysteria about corruption in the media is absurd.