Quote:
Originally Posted by GP_Matt
If Greece does transition to a new currency, does anyone know what happens to their debt?
Would their mortgage/credit card/car loans be owed in Euros or would they be converted, along with their savings accounts and paychecks, to Drachmas?
If they stayed in Euros and the Drachma tanks there could be a huge round of personal bankruptcies throughout the country during the transition.
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I read in an article from some UK paper that the most likely scenario is (not sure if true)...
1 Banks close to convert all euros to drachmas on a 1:1 basis.
2 All debts are reworked to be due in drachmas on a 1:1 basis with Euro
3 As soon as markets open the market will decide the actual exchange in which case its likely to be max worth 30pct of the Euro which decreases Greek external debt by 70pct
After the initial drop it will come back but at what exchange rate, who knows. Probably in the 1/3D/1E