07:56 – The EU summit turned out exactly as I predicted. They kicked the can a bit farther down the road, putting off Greece’s inevitable collapse for a few more weeks, if they’re lucky. Greece in turn agreed to become a wholly-owned subsidiary of the eurocracy, abandoning its sovereignty. Ironically, it was also announced yesterday that the old drachma ceases to be legal tender as of 1 March. One would have thought they’d have kept it around a while longer. It might come in useful. Or perhaps they’re just doing a central collection of all outstanding drachma-denominated notes and coins, expecting to reissue them shortly.
I’m told that no one in Europe wants to be holding Greek-branded euros, and that those of Portugal, Ireland, Spain, and Italy are also looked upon as of questionable value. In a real-world demonstration of Gresham’s Law, everyone is getting rid of southern-tier euros as fast as they can and attempting to replace them with German, Dutch, and Finnish euros. And who can blame them? The expectation is that when Greece leaves the euro, Greek euros will be the new drachma until Greece can afford to print real new drachmas. And the same will occur as the other southern-tier nations leave the euro. Frankly, I expect the opposite to happen; the poorer nations, including Belgium and France, will end up using increasingly worthless euros, while Germany and the other richer nations return to their own former currencies. Or, if they’re foolish, to a new shared currency, but one shared only among the richer northern-tier nations.
One thing is certain, though. The results of the latest euro summit bought them weeks if they’re lucky, and only days if they’re not.