CHAOS: Greek finance minister Yanis Varoufakis said Grexit would see ATMs empty ‘in 20 minutes’

Greek Finance Minister Yanis Varoufakis attends a meeting as Prime Minister Alexis Tsipras addresses his party members and ministers at the Greek Parliament on June 16, 2015 in Athens, Greece.

Yanis Varoufakis has enjoyed a sudden celebrity status since the January election that promoted him from an economics professor to finance minister of one of the world’s most financially troubled nations.

Because of that, unlike many politicians, he’s written reams of stuff on current issues — and economics consultancy Fathom have dug out a great quote on what Varoufakis thought a Grexit (Greek exit from the eurozone) would mean for his country, which he wrote in 2011.

Here’s the quote:

“If the PM announced tonight an emergency bill for the introduction of a new currency:

  • In 20 minutes all cash machines would be empty
  • There would be queues outside banks
  • The economy would collapse
  • The ECB would withdraw support for banks leading to their collapse
  • Until such time as the state printed a new currency, utter darkness would cover the country
  • 80% of households would become poverty-stricken
  • The vast-majority of people would rue the time and day this post-Bailout default was announced”

It’s a pretty dramatic illustration, and the actual article itself (in Greek) is even more clear. Varoufakis dismisses other examples of significant devaluation, mostly in Latin America, since those examples simply meant un-pegging an existing currency — for example, one which previously moved up and down in value with the dollar.

“The exit from the euro for a deficit country would send us back to the neolithic period before we could even realise it,” he argued.

He says that his own country would have to scrap its currency entirely and start again: “Greece is not Argentina.”

It’s a pretty worrying passage, given that the prospect of a Grexit now seems so real. But in another way it’s a fairly positive thing to hear (for those Greeks that want to stay in the euro at any cost).

The fact that Varoufakis thinks, or at least thought that leaving the euro would be so calamitous may be a sign that he’ll blink and accept another austerity deal — though of course, it’s not his decision to make alone.


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