No need for Grexit says one Euro Architect, Athens can Run a neo-Drachma in Parallel
Instead of pushing Greece to the exit let them run a parallel drachma alongside the euro while banking and shopping via mobile phone app, says a former European central banker involved in launching Europe’s currency union in 1999.
Bernard Lietaer who co-designed and implemented the convergence mechanism of the single European currency system (the Euro) and was president of the Electronic Payment System at the National Bank of Belgium (the Belgian Central Bank) told Russia Today TV that all the talk of a Grexit — which he stressed was not permitted under the Treaties — ignored perfectly viable and available alternatives – one of which is a dual-currency system.
His remarks came as French President François Hollande held crisis talk with German Chancellor Angela Merkel over how to stem the growing clamour for a Grexit (Greek exit orderly or otherwise, from the 19-member currency union).
As the European Union faces the gravest threat to its survival in decades — a crisis it should be remembered brought on by the unresolved sovereign debt mess thrust on Europe in 2008 after criminal global financiers blew up the world economy on the back of a gigantic US subprime mortgage scam — the hardline resolve of euro-ministers appears to be cracking.
Faced with the clear democratic mandate that emerged in the Sunday referendum (61% of Greeks repudiated any more austerity and debt bondage) the French are pushing hard to steer Brussels towards a solution and away from more confrontation with Greece’s hard-left Syriza coalition government.
French cabinet ministers have redoubled pronouncements in recent hours urging their European counterparts (messages mainly directed at intractable Germans) to consider all options including partial debt forgiveness in order to keep Greece in the eurozone.
French PM Valls: We can’t take the risk of a Greek € exit, above all for political reasons. #Greece
— Vincenzo Scarpetta (@LondonerVince) July 7, 2015
Explaining some of the background to, and his solutions for, the current crisis, Bernard Lietaer told RT: “It was decided at the time of designing the currency union there would be no option to leave the euro, it was a one way street…
“There is a lot of risk (in the current impasse). We are playing chicken on all sides here the IMF, the Greeks, the European institutions, uncertainty is being fed by all parties in this game and that is not good…
“If Greece were to leave, it would be a precedent that is not part of any treaty so we are outside the framework but personally I don’t think the choice that is being given is the appropriate choice. I think 100% in or out is in fact a false dilemma. Other solutions are available and its strange that these are not being talked about anywhere. I don’t see any reason why Greece should not have two currencies, be a participant in the euro for tourism and shipping, which are the largest sectors of the economy, but at the same time have a neo-drachma which is playing to different rules and provides capacity to reanimate the economy at grassroots level. So there is a third solution, let’s innovate….
“Switzerland for instance has for the last 80 years used in parallel, the Swiss franc and a business-to-business currency, its never talked about but it works fine…
“The solution I speak of would introduce precedents that are a challenge to the classical order but I believe we should be preparing for the information age… we are using an industrial age technology in the digital age…
“Every Greek family has a mobile phone so we could create new payment systems with parallel currencies, that has not been done before… “No on talks about Iceland these days but Iceland didn’t do what the official orthodoxy required of them (back in 2008/9). It let banks go bankrupt, put bankers in jail and today it is discussing allowing currency to be issued only by the government instead of via (private sector) bank debt, this is a different environment and its taboo in the mainstream media but its working…”
Whether his views are taken into account or not, the alternatives he raises are certainly more constructive than the current racial venom being spat across negotiating tables and down phone lines in Brussels and Berlin.
The German press at its finest:
— Bruno Waterfield (@BrunoBrussels) July 7, 2015
Story: Ken Pottinger
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