
Greece draws up drachma plans, prepares to miss IMF payment - mixmax
http://www.telegraph.co.uk/finance/economics/11513341/Greece-draws-up-drachma-plans-prepares-to-miss-IMF-payment.html
======
Gatsky
There is some degree of hostility towards Greece in this thread (albeit mostly
from 2 people, one of whom joined HN 30 minutes ago).

It seems appropriate to point out that it is public knowledge that the EU
was/is irrationally hostile towards Greece during the Eurozone crisis.[0]

Now they have to play high stakes fiscal politics with a very clever bunch of
largely unrestrained leftists. Frankly, they can't blame anyone else for this
problem.

[0] [http://www.telegraph.co.uk/finance/economics/11226828/Tim-
Ge...](http://www.telegraph.co.uk/finance/economics/11226828/Tim-Geithner-
reveals-in-the-raw-how-Europes-leaders-tried-to-commit-financial-suicide.html)

~~~
r3m6
The quoted article is one point of view. As with all current events, only
history will tell who is wrong or right.

Another viewpoint is: It is "public knowledge" that the same "bitter EU
medicine" worked well for Ireland, Portugal and Spain. So from the "Pigs"
countries - only the "g" refuses to take it. That is their right. But then
don't blame/insult the doctor.

~~~
youngtaff
I think there are plenty of people in Ireland, Portugal and Spain who would
argue that the 'bitter EU medicine' worked for them.

Spain has an unemployment rate of 23% for starters.

We should also take a look at Iceland, where going a different route to the EU
medicine worked well for them.

~~~
pfortuny
That is so true... Few people "working well" in Spain. But TAXES.

~~~
ptaipale
Taxes are not particularly high in Spain. They are below OECD average, not to
mention below EU or Eurozone average.

[http://stats.oecd.org/index.aspx?DataSetCode=REV](http://stats.oecd.org/index.aspx?DataSetCode=REV)

In 2013, Spain's tax revenue was 32.6 % of GDP. Compare that to Germany 36.7
%, Netherlands 36.3 % and Finland 44.0 %. Also consider that these as
proportion of tax revenue to official GDP, and it's pretty safe to assume that
Spain has more in grey economy (not in official statistics) than northern Euro
countries.

------
drapper
I'm full of ambivalent feelings towards Syriza, on one hand they are (were) a
nice breath of fresh air, a promise of some positive change, on the other:
they turned out to be kinda arrogant, kinda short-sighted and pretty bad at
diplomacy. Politics isn't about being right 100% of time (not that they were),
it's about being effective, and in that they are lacking badly. Seems they
entered this whole thing with this cocky approach of "now we'll show 'em, them
dumb fucks!". They've got their wrists slapped for that and now complain again
on how bad EU is treating them. Hard to get sympathy for that.

Good article on this from Foreign Affairs:
[http://www.foreignaffairs.com/articles/143294/david-
gordon-a...](http://www.foreignaffairs.com/articles/143294/david-gordon-and-
thomas-wright/syriza-stumbles)

Some quotes:

"Yanis Varoufakis, the Greek Finance Minister, for one, singled out Italy for
having debt that was “unsustainable,” which served only to infuriate Italian
Finance Minister Pier Carlo Padoan"

"Within a day of winning the Greek election, he (Tsipras) called the Russian
ambassador and protested the EU’s statement condemning Russian-backed
Ukrainian separatists for an attack on civilians in a Mariupol market"

"But even then, Greece could have survived its mistakes were it not for one
other fatal decision: to move forward with its electoral platform before
renegotiating its debt, increasing government spending without the requisite
funds and reversing or stalling key reforms (...) All these factors positioned
Greece to buckle in its negotiations. It was simply hemorrhaging far too much
money far too fast to hold its position."

~~~
icebraining
Have you considered the apparent arrogance might be a strategy?

~~~
cmdkeen
It's a really bad strategy in that it doesn't prepare the Greek people for
anything bad happening. The short term consequences of Greece crashing out of
the Euro is going to be very painful for Greece.

~~~
taliesinb
> The short term consequences of Greece crashing out of the Euro is going to
> be very painful for Greece.

For Greece? Greece will recover, and it's hard to do worse than it is
currently doing. And as others say, a floating currency will help correct the
imbalance of an exporter like Germany dominating the EU.

And bizarrely, I suspect investment will be quick to return if Greece is seen
as being out from under its cloud. Investors seem to care less about previous
behavior than about future prospects.

> It's a really bad strategy in that it doesn't prepare the Greek people for
> anything bad happening.

No... Germany stands to lose the most, because the likely eventual outcome is
the collapse of the entire monetary union, and the wide markets that Germany
has enjoyed.

~~~
cmdkeen
Oh it will be a problem for other countries. But there are short term
consequences to a Grexit for Greece, the long term consequences may be good
but immediately you'll be looking at; capital controls so people can't move
their money around, Euros being forcibly converted to drachma, Greek banks
going bust (combined with capital controls that isn't fun), a temporary
inflation spike.

So short term Greece's social problems will be exacerbated - and that is the
problem, arrogance suggests that there won't be a problem. The government may
be looked back on a different light in 5-10 years time, but when there is
renewed rioting in the streets in a month that isn't so good.

~~~
holoto
5-10 years? Not if you take a look at Argentina.

------
roymurdock
It's going to be really interesting to see how far creditors are willing to go
in order to get the money that Greece either (A) doesn't have or (B) is
unwilling to pay.

I think (A) is more applicable in Greece's case. The Euro has favored export
economies, such as Germany's, for the past decade. Greece needs a currency
that will support its economy, which is much different than Germany's. The
Euro's benefits of easier inter-Europe trade and increased European power in
the global currency markets have been far outweighed by its inability to cater
to the _very_ different economies of the various EU nations.

It's important to look at who owns Greece's debt to see who is really pushing
for repayment. [0] The EFSF owns 45% of the government's 315bn Euro debt.
Amazingly, according to the EFSF's last financial statement in 2013: "As at
[sic] 31 December 2013, the EFSF as an issuer has been assigned an AA rating
by Standard & Poor's, an Aa1 rating by Moody's and an AA+ by Fitch Ratings and
the highest possible short-term rating from all three major credit rating
agencies — Standard and Poor's (A-1+); Moody's (P-1) and Fitch Ratings (F1+)."
Germany, Italy, and France own the largest number of shares of the EFSF with
Germany at 771k, France at 579k, and Italy at 509k. Most of the other
countries own anywhere from 5k-100k shares. [1]

I just wonder if people are going to get greedy/desperate enough to pull a
vulture bank maneuver and start seizing real assets - see the seizure of an
Argentinian Naval Vessel by hedge fund Elliot Capital. [2] Now that would be a
very messy affair.

[0] [http://www.bloomberg.com/news/articles/2015-02-02/greece-
see...](http://www.bloomberg.com/news/articles/2015-02-02/greece-seeks-third-
debt-restructuring-who-s-on-the-hook-)

[1]
[http://www.efsf.europa.eu/attachments/EFSF%20Financial%20Sta...](http://www.efsf.europa.eu/attachments/EFSF%20Financial%20Statements311213.pdf)

[2] [http://www.nytimes.com/2012/10/19/world/americas/seizure-
of-...](http://www.nytimes.com/2012/10/19/world/americas/seizure-of-argentine-
ship-forces-shake-up.html)

~~~
twobits
"The EFSF owns 45% of the government's 315bn Euro debt."

You should go back in time, and read the "details". The debt was owned by
german and french banks. What essentially happened is that those banks were
bailed out with the money of all the european tax payers. (Greek, german,
french, etc.)

~~~
roymurdock
Any sources on this? I would be very interested in a detailed account of how
the EFSF was used to nationalize private bank debt and spread it across the 17
member states of the EU. This would seem almost criminal in nature to me, but
I wouldn't be surprised if it were true.

------
holoto
Everyone can decide to not pay back lent money and it's his or her right to do
so.

It does make getting contracts in the future much more difficult though.

~~~
venomsnake
I wish more people remembered this - breach of contract is business, not moral
decision.

~~~
appleflaxen
If morality is determined by "do unto others as you would have them do unto
you", then I think this probably is immoral. It's fairly low on the range of
immoral behavior, but it shouldn't be a purely economic calculation, in my
opinion.

~~~
icebraining
The creditor failed that by not offering the credit at zero interest, as they
would have liked to have done unto them. Why should the golden rule only be
applied one way?

~~~
appleflaxen
I don't understand your line of reasoning.

~~~
icebraining
You are a lender of money. Someone asks you for money. What's the interest
rate you should charge if you apply the golden rule? Zero, because that's what
you would want to be charged. Therefore, the creditors in this case broke
themselves the golden rule, and shouldn't complain that the debtors did also.

~~~
appleflaxen
I think you are knocking down a straw man argument; namely that "the golden
rule means 'give away everything you own'".

I don't think anybody who would use the golden rule as a moral tool would
really interpret it that way.

~~~
icebraining
Not give away; I still wrote "lend".

------
holoto
“We are a Left-wing government."

The government is a coalition of right wing nationalists and left wing -
nationalistic - marxists. Not sure why this should be called a left wing
government. Calling the government left-wing is marketing to get sympathies
with leftist people in Europe.

So I'd rather call the government nationalistic populist.

~~~
lvs
The problem is that this article is from a typically conservative source. It's
not written as straight news.

~~~
ptaipale
As if other sources would always write their stories as straight news. Try to
read The Guardian.

However, what's written seems not far from truth. Other sources have been
reporting how Greece is running out of cash.

Feb 6: [http://www.wsj.com/articles/greece-could-run-out-of-cash-
in-...](http://www.wsj.com/articles/greece-could-run-out-of-cash-in-
weeks-1423212223)

Mar 23: [http://business.financialpost.com/business-
insider/greeces-g...](http://business.financialpost.com/business-
insider/greeces-government-has-only-2-weeks-until-the-money-runs-out-report)

Apr 2: [http://www.reuters.com/article/2015/04/02/us-eurozone-
greece...](http://www.reuters.com/article/2015/04/02/us-eurozone-greece-
liquidity-idUSKBN0MT1HB20150402)

And now, with "finance ministry officials are categorically denying any
suggestion that Greek representatives said the country would run out of cash"
I think could be confirmed that Greece is running out of cash.
[http://www.theguardian.com/business/live/2015/apr/02/greece-...](http://www.theguardian.com/business/live/2015/apr/02/greece-
reform-plan-bailout-markets-live-updates)

------
crististm
"If you have to take an onerous deal against your people with your enemies,
better die by their sword" \- Stefan the Great

~~~
userulluipeste
I agree with Ștefan (and with the lessons that history provides), but I have
to disagree with the context in which this is put. We were talking about
Europe here (well, the Eurozone part of it, which is nothing but a level of
integration), where we talk about "us" on a broad (unional) level, about
solving problems that we all have in our court. The next thing you know is a
shift in prospective, where "us" got restricted on a national level (guess why
and on who's interest), and now the rest of what was formerly "(the non-Greek
part of European) us" you count as "enemies". Maybe we are more different than
we wanted to admit, and we may have to work harder for what makes us "us (in
an acceptable formula)", but we are not enemies.

------
davidw
Odd. I don't see the same kinds of news - making it look like a Greek exit is
imminent - elsewhere, like ft.com or wsj.com, who certainly cover this kind of
thing.

~~~
ptaipale
The subject has been around and progressing:

[http://www.wsj.com/articles/banks-ready-contingency-plans-
in...](http://www.wsj.com/articles/banks-ready-contingency-plans-in-case-of-
greek-eurozone-exit-1420975504)

[http://www.nytimes.com/2015/03/19/business/international/war...](http://www.nytimes.com/2015/03/19/business/international/warnings-
raised-of-a-greek-exit-from-the-euro.html?_r=0)

[http://www.ft.com/cms/s/0/47aa4dce-d2f7-11e4-b7a8-00144feab7...](http://www.ft.com/cms/s/0/47aa4dce-d2f7-11e4-b7a8-00144feab7de.html)

~~~
davidw
Sure, I've been following it pretty closely, as 1) it's interesting, and 2) I
live in Italy, where we could potentially see some repercussions.

However, this article - and especially the headline - make things sound quite
imminent.

It wouldn't be the first to mention capital controls or something else
happening the weekend following this one, but they make it sound much more
probable than others have.

------
infraruby
> No developed country has ever defaulted to the Bretton Woods institutions.

How is this different to the
[https://en.wikipedia.org/wiki/Nixon_Shock](https://en.wikipedia.org/wiki/Nixon_Shock)?

~~~
logicallee
it's similar; getting off the gold standard allows you to print money, and
insofar as they don't have the right to print Euros and therefore it is like
Gold (can't be created by fiat, by them at least, they have to get it from
somewhere), introducing their own floating money is very similar.

A better solution would be to integrate the Greek economy into a paneuropean
federal country, that simply eats the losses of Greece. I am certain some
states in America are net beneficiaries of federal spending (more government
dollars flow into it than are retrieved through taxes.)

This is likely a lot better solution than local currencies: I would back a
(metaphorical) 'civil war' (being on the side of the North of course) in
Europe in which countries are really kind of shoehorned back into a federal
European country under centralized rule, a central constitution, and with
limitations on 'state rights'. (Note that all the while, as in the analogy,
this central federal paneuropean country would remain democratic.) I've never
heard anyone else express this opinion though.

EDIT: _I don 't mean civil war literally of course, and have edited to
clarify. I was just drawing an analogy with the South seceding from the union.
Obviously there is 0 chance of any actual war, nor would anyone want one for a
minute. The difference between past wars is that there actually are democratic
European institituions - i.e. the EU - just as America remained democratic
through and after its civil war._

~~~
philwelch
I think Greece deserves to be more than just the Mississippi of Europe.

~~~
adventured
Why do you think that?

Greece would be fortunate to have Mississippi's economy about right now, they
have a 26% unemployment rate; Mississippi is 7.x%.

Greece has 100 times as much government debt as Mississippi.

Greece has a ~$200b economy, $20k per capita GDP, and 11 million people.
Mississippi has a $110b economy, with just 3 million people, and a per capita
GDP of about $37k or soon to be twice that of Greece.

If Greece does everything right for 30 years, they might catch back up to
Mississippi.

Their actions so far are rapidly leading them toward being a second tier
European economy, in the category with Slovakia, Czech, Slovenia, Russia,
Poland etc. instead of being with eg France, Italy and Germany. In fact
they're already there, the question now is how much further are they going to
fall - the likely answer is they'll lose at least another 1/3 of their real
economy.

~~~
icebraining
There's more to life, and to the proposed federal country, than the economy.

~~~
adventured
That depends on how badly off you are.

Greece has an amazing history. That history won't feed or employ people, or
keep Greece economically competitive such that their children have a good
future.

When you talk to people from Bulgaria, Ukraine, Moldova, Macedonia, etc. they
tend to be very focused on economy and money, and there's a good reason for
that - they're trying to survive.

------
userulluipeste
Greece got in European Union too easy and this is the consequence. If Greece
gets out, it would shake the faith in the E.U., true, but on the other hand
that may be a good move for everyone. For E.U. in the way of not having more
problems that it can handle and finally spending attention on things that are
rather "not so important" right now. For Greece, it would be a much-needed
"time alone", to get to truly understand the price and meaning of a few
things. They seem to haven't had enough time for that.

~~~
euccastro
The day after Greece gets out the EU will have more and bigger problems than
the day before.

~~~
jules
Though insignificant compared to the problems that Greece will have.

~~~
euccastro
Don't be so sure.

~~~
jules
Greece has a relatively small industrial sector and relies very heavily on
imports, which will be completely unaffordable with a new currency. Their huge
tourism sector will suffer when they go out of the EU. Their productivity per
hour worked is very low. They still have a huge corruption and nepotism
problem, an a people who will have to scale back their standard of living.
Comparable to the trouble a country like Germany will be in when Greece leaves
the Euro? I don't think so.

~~~
ptaipale
> Their huge tourism sector will suffer when they go out of the EU.

Would Greece have to exit from EU when it exits euro?

BTW lots of Europeans do tourist trips to Turkey, even though it is not in EU.

~~~
jules
Greece would not necessarily have to exit the EU when it exits the Euro, and I
don't know what would happen. If Greece exits the Euro unilaterally but wants
to stay in the EU I don't know whether expulsion would be likely. There is
actually a paper on this topic which argues that it would be possible for a
country to leave the eurozone without leaving the EU:
[http://www.tilj.org/content/journal/48/num2/Dammann125.pdf](http://www.tilj.org/content/journal/48/num2/Dammann125.pdf)

Lots of Europeans do travel to Turkey. Funnily enough I am currently on a trip
from the EU to Turkey. Here's a few facts to consider:

\- I have to exchange Euros to Turkish Liras, and for tourists the exchange
rates are not good. \- A flight to Turkey cost me about €200 while a flight to
Greece is far cheaper even thought he distance is similar. \- It's very
expensive to call my family from Turkey. Calling from Greece is cheap due to
the EU. \- My bank card is not accepted everywhere, whereas in Greece I
believe it would be. \- I have to get a visum for Turkey. \- Travel insurance
for Turkey is more expensive. \- An european car trouble emergency service
membership works in Greece but not in Turkey. \- The prices in Turkey are far
cheaper than in Greece. Greece could adjust their prices to Turkish levels
(and likely would have to) after leaving the euro and EU, but then they earn
far less of course.

Subjectively I do feel safer in Greece because they are in the EU. Also
perhaps some Europeans would not travel to Greece because of perceived anger
from Greeks to the rest of the EU, or they wouldn't travel to Greece out of
spite if they default on European debt.

~~~
ptaipale
That's what I thought too, too: exit from euro does not have to mean exit from
EU.

BTW at least in Istanbul - not necessarily elsewhere in Turkey - you'll shop
in many places with cash euros. But yes, there are some places where you
actually do need liras. For exchanging cash, I've for a long time depended on
withdrawing cash from an ATM; the rate is better than in kiosks in almost any
country (particularly better than the rip-offs at my home airport which is
close to a scam).

Higher flight prices are possibly due to airport taxes and such things, or
just random air ticket pricing quirkiness, probably not EU. From where I live,
flights to Istanbul that I sampled are slightly cheaper than flights to Athens
(distance is practically the same).

It is interesting that Turkey requires a visa from a number of EU countries. A
visa seems really simple to get, though (on arrival at airport).

The recent Greek hyperbolic anger against Germans is one thing that
discourages me from going there as tourist (I'm not German, but I might be
mistaken for one). In that, Tsipras and his crowd are not doing a great
service on their country. But maybe it was what they needed to do in order to
win elections and then explain why things don't start improving overnight.

~~~
jules
Yes, it may be irrational, but I do think that's what many people fear. Even
if you don't expect any real problems, the feeling that you are not
appreciated in another country can easily make people decide to visit another
country instead.

BTW, Turkey recently changed the rules regarding visas; now you cannot get a
visum at the airport any more, you need to apply and pay online and print out
the application form, which you exchange for a visum at the border. It's still
easy, but these small hurdles do add up.

------
lifeisstillgood
We are already printing a trillion Euros in the current round of QE /
stimulation. Why not make that 500 Bn more and use that imaginary money to
release the economies of Greece Spain and Portugal. With the carrot of debt
freedom, almost all economic and structural reforms become possible.

~~~
xxxyy
That would be only delaying the issue, as QE is a program of buying bonds with
imaginary money, not giving out the imaginary money for free. Bonds have
maturity dates.

[http://www.forbes.com/sites/robertlenzner/2013/11/25/the-
fed...](http://www.forbes.com/sites/robertlenzner/2013/11/25/the-fed-has-been-
cornering-the-treasury-market-for-the-past-four-years/)

~~~
lifeisstillgood
I'm not sure about that. Buying bonds is merely one of many mechanisms to
stimulate demand in the assumption we are in a demand poor crisis. Demand in
Greece is sooo depressed because of the enormous debt that relieving it at all
will have a positive demand experience.

Add to which Keynes original idea is to bury the money in bottles and any form
of monetary supply increase is good.

I think I agree with downthread - finances as a form of control - it's a
banker mentality.

------
tdkl
Good. I wonder who will follow next.

~~~
holoto
Not sure this will work when countries do not pay back credits or bonds. Most
countries today need to raise money to finance their spending. If everyone
does this, the lending market will break down.

Not sure that this helps those countries that depended on credits most (like
Greece).

I'm also not sure if it is the best strategy for Greece to bite the hand (EU
as the IWF is just the beginning) who transfered billions of $ to Greece over
the last decades. If the Greece government has a plan to not depend on credit
and EU subsidies in the future, hurray to them. Perhaps with the new Russian
conflict they could trade in EU subsidies and wealth transfer to renting bases
to Russia. But they will find out it's much harder to break a 100 year
contract for a Russian base in Greece than a contract with the IWF.

If not, this looks like a bad move.

~~~
youngtaff
Problem is the Greek bailout was actually a bailout of the German and French
banks who lent Greece money.

The EU sacrificed Greece to save their own skins

[https://www.opendemocracy.net/can-europe-make-it/thomas-
fazi...](https://www.opendemocracy.net/can-europe-make-it/thomas-fazi/troika-
saved-banks-and-creditors-%E2%80%93-not-greece)

~~~
taliesinb
Very few people seem to understand this perverse dimension to it _.

I even saw one mainstream newspaper use the phrase "economic aid" when
referring to the loans given to Greece to service their existing debt!

_ much the same perversion as the 2008 bailouts going to predatory lenders
instead of bankrupt US homeowners

------
vixen99
And with the first hard Left government in Europe since WW2, Russia looks
forward to an enhanced presence in southern Europe and the Mediterranean.
“Russian-Greek relations have very deep roots in history,” says Tsipras.

~~~
stingraycharles
This is not what the article says. Please refrain from adding noise to the
discussion.

~~~
mtrimpe
It's actually rather relevant geopolitical commentary. If Greece won't be
getting money from the IMF they will after all need to find a new monetary
partner.

There have been clear overtures in that direction already and key party
officials already have long-standing relationships with one of Russia's most
extreme and influential ideologues [1].

Not to mention that the article itself clearly mentions the visit to Putin on
8th of April; one day before the possible default.

[1] [http://www.rferl.org/content/greek-syriza-deep-ties-
russian-...](http://www.rferl.org/content/greek-syriza-deep-ties-russian-
eurasianist-dugin/26818523.html)

~~~
kansface
Its really hard to imagine anyone giving Greece even more money after a
default to the IMF.

~~~
roymurdock
Agreed. First line of the article: "Greece is drawing up drastic plans to
nationalise the country's banking system and introduce a parallel currency to
pay bills"

The solution is for Greece to either (1) cash out of euros into another
nation's currency for the time being or (2) create their own currency and
start stocking the Greek banks with it. Not sure what kind of purchasing power
a new Greek currency would have outside of Greece though. I'd say the more
likely option would be for them to default, sell their remaining Euros for USD
(further undermining the price and credibility of the Euro). Not sure if this
is possible and it would likely get really messy.

~~~
kansface
What would be the advantage of owing dollars over euros when they control
neither and dollars are gaining value?

~~~
roymurdock
Their debt (in euros) would be depreciating relative to the dollars they hold
which would be appreciating.

------
holoto
I applaud the Greek Government. They show how important a nationalistic point
of view is (as in "Greece first").

For 70 years no German Government could win on a nationalistic ticket. The
vast majority of German elites were pro-Europe. The majority of people saw the
billions of $ wealth transfer to the southern and eastern countries as moral
compensation for the war.

With comparing the elected German chancellor to Hitler, comparing the finance
minister to a concentration camp manager and the talk of reparations, Germans
felt insulted and black mailed and Greece created cracks in the above
narrative.

The Greek government achieved that the next German government and generation
of conservatives will win on a nationalistic ticket to fend of right wing anti
European parties like the AfD (Alternative For Germany). Which is good, as the
best for Germany is not a political union like the EU but TTIP and something
like NAFTA combined with a China style currency policy. The EU helps small
countries gain disproportional power and poor countries gain money transfers
while it binds and hinders Germany and France. The US does what's best for the
US for the last 200 years. A proud symbol to learn from.

Next step could be the UK EU exit, FN in France will help, TTIP and with
Polish NAFTA love this could be the first stepping stones for an unpolitical
economic union.

------
wesleyy
'“We are a Left-wing government. If we have to choose between a default to the
IMF or a default to our own people, it is a no-brainer,” said a senior
official.'

Wow, what an incredibly entitled attitude to hold.

~~~
nhstanley
What's so entitled about it? The IMF is a creditor just like any other, and
assumes risks when it makes loans. The duty of the Greek government is—without
question—to its people. While you can certainly argue that default is not in
the people's best interest, if the leaders honestly think that's the best
option then that's what they should do.

~~~
raverbashing
The IMF is a creditor just like any other, -> _and assumes risks when it makes
loans_ <-

Exactly this

All that Greece and the institutions that lent money to them did was to push
the problem forward and make it worse

Greece has basically two options: deflate their prices in Euro (what austerity
ends up doing) or have a currency that can float. It's that simple

(Or having a stronger fiscal union in the Eurozone, but that's hard as well)

~~~
caf
Note that "prices" here is an expansive sense of the word that includes wages.

~~~
raverbashing
Correct.

Because prices embed wage costs and ability of people to pay.

