If Greece – or any other country – were to leave the euro, it would have to be a total surprise, one probably announced on a Sunday ahead of the markets opening to stop a run on the banks.
So it could be today, or next Sunday or the one after that, but the point is that it would have to be agreed by the European Central Bank and Greece's central bankers once the markets are closed and before they open, so that no one – not the public, the corporates, or the hedge funds – has any idea that it's going.
And, according to a new study by Accenture, any talk of withdrawal or break-up of the eurozone would have to be met with complete denial by the bankers and the politicians, so it wouldn't be possible even to have a new currency printed in time.
But that doesn't mean it cannot happen – instead of printing new notes, the new Greek premier, Lucas Papademos, left, could just put new stickers on existing euro notes, or, indeed, frank them with new symbols or signs. Like all paper euros, each note has an initial which denotes the country where it was printed – Y for Greece, S for Italy, V for Spain and X for Germany – so the Greeks could also just frank all the notes in circulation with a big Y.
In a new paper – If a Country Leaves the Euro, authors Dean Jayson, James Sproule and Oliver Knight argue that the most likely way for a country to leave would be if the nation in question – say Greece – is asked to make an exit because it hasn't met the bailout requirements, such as the austerity budget which the Greeks are trying to adopt.
As it would be difficult to print new banknotes, they suggest the most likely option would be to create an electronic currency – rather like the euro between 1999 and 2001. The first instruments to be switched to the electronic currency would most likely be all payments and salaries.
But, what to do about debt? Since devaluation of the debt was the reason to adopt the euro in the first place, they say it's reasonable to assume that all public debt, savings and private debt in the domestic banks – as well the assets and liabilities held in branches of domestically registered foreign banks – would also switch to the electronic currency.
And there's lots of debt; according to the Bank for International Settlements (BIS), the outstanding domestic and international bond and debt securities in Greece last December was $556bn. While bank debt is unlikely to be called in, companies will want to align the currency of their revenues and debt payments – the BIS figures show the external loans and deposits in banks in Greece are around $115bn. And companies will want to hedge their new bank debt with foreign-exchange exposure – which Accenture estimates for Greece could be a daily average of $24bn. It would need capital controls too, to stop people fleeing with their cash, and would have to find a way of stopping foreign investors from suing for default.
While the original Maastricht Treaty does not include any measures for opt-outs, it's a painful process which many countries have been through before. In February 1993, the Czechoslovak koruna was split into the Czech koruna and the Slovak koruna, although Slovakia went on to adopt the euro. And when the Habsburg empire broke up, all the new countries printed currency with their own nation's symbols.