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Monday, 1 February 2016

Grexit. Done.

You get a new currency in Greece the instant the ECB closes the Greek central bank’s TARGET2 account. At that point all transactions across that interface will simple fail.

So all you need to do is put in place correspondent banking arrangement with commercial banks to do the *exchange* between Greek Euros and German Euros. And that simply requires a bank with a leg in both camps – a reserve account with Greece and a reserve account elsewhere in the Eurozone. Or a correspondent between two banks that achieves the same thing.

The problem here is a bunch of people over thinking the problem. Get down to the essence of the issue – exchanging Greek Euros for German Euros in a float situation.

Then you keep everything else *exactly the same as it is now*.


Of course the Greeks won't do it.