Greece doesn’t have a ‘Grexit’ plan.
Writing on Sunday, the BBC’s economics editor Robert Peston reports that there have been essentially no preparations made for a Greek exit from the euro.
So the first rather chilling thing I’ve learned, from well-placed bankers, is there have been no conversations between the Bank of Greece, the government or regulators and Greece’s commercial banks about the technicalities of leaving the euro and adopting a new currency.
This is astonishing — and some would say pretty close to criminal — given that on Wednesday night the president of the European Council, former Polish prime minister Donald Tusk, was explicit that this weekend’s negotiations were all about whether Greece would stay in the eurozone.
And this seems like a problem.
Right now, Greece is working through a proposal from its European creditors that demand a number of changes by Wednesday just to restart negotiations on a new bailout. A Greek government official called this proposal “very bad.”
And this proposal followed the rejection by the Eurogroup of a Greek proposal from late last week that was essentially what Greece called a referendum on, and then rejected.
So, Greece and its prime minister Alexis Tsipras have taken a few steps back politically in the last few days.
And the problem is that this latest Eurogroup proposal included a sentence and contemplated a potential “time-out,” or short-term exit of Greece from the euro.
This, then, makes Peston’s report quite worrying. For while there is a still a ways to go before Greece would actually find itself exiting the euro, it is certainly close enough to warrant there being contingency plans in place.
(via Naked Capitalism)
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