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Harvard economic historian Niall Ferguson went on Fareed Zakaria GPS on Sunday to discuss the euro crisis and how a Greek exit from the common currency would play out.Ferguson told Zakaria it would go down on a Sunday night:
So, what you would be talking about would be an announcement, presumably on a Sunday night, along the lines of “news just in, those euros that you have in your bank from tomorrow, will be drachma. There’ll be a little bit of a teething problem because the ATMs won’t work for a few days while we get the drachmas into place, but don’t panic. There’s going to be a bank holiday until, let’s say, Thursday.”
However, this would cause panic to spread across Europe as everyone begins to ask, “who’s next,” said Ferguson. And listening to his stories, you would think Europe is primed for panic.
Even Ferguson’s taxi driver asked him about the euro stability situation:
I was in Barcelona just a few weeks ago. Everybody, from the taxi driver who picked me up at the airport to my editor, was asking me should I move my money out of a Spanish bank and into a German bank?
And that’s an option. It’s not an easy to do. It involves a certain amount of hassle, but it’s doable. That’s the nature of monetary union.
The moment people fear that tomorrow their euros are going to be pesetas in the Spanish case, they start to think to themselves well I would rather have something that will be a Deutsche Mark the day after tomorrow if this whole thing is going down.
Given the mess the euro crisis has morphed into, Ferguson told Zakaria, “It’s really a can of worms crossed with Pandora’s Box at this point.”
Check out the full interview on CNN.com.
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