What happens when Greece defaults. Here are a few things:
Every bank in Greece will instantly go insolvent.
The Greek government will nationalise every bank in Greece.
The Greek government will forbid withdrawals from Greek banks.
To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.
Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)
The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts.
The Irish will, within a few days, walk away from the debts of its banking system.
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