The recent Greek capitulation under pressure from other euro member countries, led by Germany, demonstrates that euro members have de facto ceded sovereignty over fiscal policy to the EU. While this arrangement may be acceptable to some countries, perhaps even Greece, it will be resisted by others.The Guardian
However, as the Greek failure also demonstrates, any eurozone country wishing to restore fiscal sovereignty, or restructure some of their debt, or implement any policy or set of policies that runs afoul of the preferences of certain Eurogroup finance ministers will have near-zero negotiating leverage if they fail to plan, credibly and in advance, for the introduction of a viable alternative currency.
Without this critical card to play, the country in question will be held hostage by the now politicised ECB. Its domestic banking system and financial markets will be shut down, the economy will grind to a halt and the government will face either a humiliating retreat or full capitulation.…
Greece crisis proves the need for a currency Plan B
John Butler
ht Clonal
Also
The Greek government is to surrender powers over vast areas of economic and social policymaking to its eurozone creditors under draconian terms agreed for a new three-year bailout.
The 29 pages of conditions concede ultimate authority over much of Greek policymaking to the eurozone and establish a system of quarterly reviews of the reforms by the troika of institutions – the European commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – representing the creditors.Ian Traynor and John Henley, Greek bailout terms to give eurozone vast powers over policymaking
The document says: “The [Greek] government commits to consult and agree with the European commission, the European Central Bank and the International Monetary Fund on all actions relevant for the achievement of the objectives of the memorandum of understanding before these are finalised and legally adopted.”
The terms for the bailout – worth €85bn (£61bn) according to a senior EU source – foresee a radical overhaul of the Greek economy, stipulating major reforms of health, welfare, pensions and taxation systems, alongside more ambitious privatisation schemes. It also awards the troika decisive influence over reforms of the struggling banking sector…
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It is summarized at Zero Hedge:
Greeks Ditch Euro For Alternative Currencies As Parliament Votes On Bailout
ht Unknown in the comments
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Also on ZeroHedge - Greeks Ditch Euro For Alternative Currencies As Parliament Votes On Bailout
Quote:
So while the Greek populace simply abandons the euro as a payment method, their elected officials will huddle together and legislate away the country's last vestiges of sovereignty on Thursday in exchange for €86 billion, the vast majority of which will be immediately credited electronically to the very same people who just disbursed it. If that sounds completely ridiculous to you, that's because it is and we suspect that sometime over the next six decades of debt servitude some enterprising politician will wake up and realize precisely what Christos Papaioannou, a Greek computer engineer and TEM user who spoke to The Journal, came to understand a long time ago when it comes to the euro. Namely that "you’re used to a method of doing things and suddenly, you realize there are other ways too."
Alrenative currencies won't do the trick for Greece as long as Greece's government taxes only in euros and taxes are cohersive. There is going to be unemployment caused by euro overtaxation.
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