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Tuesday, 14 February 2012

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Suppose they do default within the euro: what if the Greek government passed a law stating that every contract in Greece was now rewritten with half-a-euro replacing a euro. So rents, wages, pensions etc would all be halved. It would be traumatic but it might at least shorten the agony.

(P.S. FDR enforced a comparable default in the US, overriding contracts namely changing the terms of bond,s including Treasuries.)

It's an idea, I suppose, in effect, a semi-default. On the other hand, I don't quite see how they could get away with what would be a devaluation of the euro whilst being a member of the euro system.

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