by Warren Mosler
Yes, this is viable operationally, as it going back to drachma.
However, there’s a lot that can go wrong, as demonstrated by prior episodes of inflation, high interest rates, high unemployment, and currency depreciation.
Not to mention the temptation of the channels of mass corruption also too often employed in the past by local leaders, which will be an immediate consideration at the referendum.
(FT) — Haris Theoharis, formerly the head of Greece’s independent revenue collection office, said the government was preparing to issue IOUs next month to pay more than 600,000 public sector workers as a first step towards readopting the drachma.
He said a team from the national accounts office at the finance ministry was working on a “drachma plan” at the office of prime minister Alexis Tsipras.
“The first stage is to replace euros with IOUs that could be sold at a discount, for example, and used to pay taxes,” Mr Theoharis told the FT. “It would take several months to implement the return of the drachma.”
A government spokesman denied the existence of such a team.