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Current account deficits? Less certain, but still not entirely unlikely.
Friends come and go. Enemies accumulate.
Then the deficit chickenhawks would have to either back down or move for expulsion. And the chickenhawks have a blocking minority, but they don't have a qualified majority.
Doesn't matter, though, they still won't have a working majority.
If the threat of expulsion from the relevant communities is not sufficient (and if the local population accepts the Greenbacks as payment for services rendered), the only way to stop them is sending in the gunboats.
But of course, if they are forcibly ejected from the -zone, they would have no particular reason to issue Greenbacks instead of just printing their own money.
But they can't print -notes or mint -coins without permission from the Bundesbank.
Well, actually they can, but the official EU stance would be that they were counterfeiting.
So, a default would free up about 30% of GDP in government expenses. Though, in terms of reducing deficit, only the interest payments would count.
So I'm not sure Greece couldn't make do just with the tax revenue. Plus, they could issue some sort of IOUs redeemable in payment of state taxes as a form of currency.
By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
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