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A Roadmap for Exiting the Euro – Technical Preparation and Execution from the Viewpoint of the Exit Country

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  • Dirk Meyer

Abstract

An exit from the Eurozone requires thorough planning and preparation. Technical barriers complicate the introduction of a national currency within a short time period. Machines have to be retrofitted, bank accounts have to be redenominated and the new currency has to be physically produced and distributed. Although a longer-term announcement and a broad range of information about the planned currency switchover, similar to the introduction of the euro with a run-up of three years, may promote acceptance among the population, the time factor is absolutely crucial to the successful introduction of a currency in this case. This applies both to a new currency with appreciation expectations, whereby an (illegal) influx of euros is anticipated, and to a new currency threatened by depreciation, which will be confronted with capital flight and the withdrawal of euro deposits in the run-up to monetary integration. Economic agents should therefore be left as little time as possible for anticipative adjustments that impede the switchover. Dirk Meyer, Helmut-Schmidt University, Hamburg, presents a possible roadmap for a successful switchover process.

Suggested Citation

  • Dirk Meyer, 2012. "A Roadmap for Exiting the Euro – Technical Preparation and Execution from the Viewpoint of the Exit Country," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 65(06), pages 22-27, March.
    • Handle: RePEc:ces:ifosdt:v:65:y:2012:i:06:p:22-27
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    References listed on IDEAS

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    1. Heinz-Dieter Smeets, 2010. "Ist Griechenland noch zu retten?," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 90(5), pages 309-313, May.
    2. Scott, Hal S, 1998. "When the Euro Falls Apart," International Finance, Wiley Blackwell, vol. 1(2), pages 207-228, December.
    3. Barry Eichengreen, 2010. "The Breakup of the Euro Area," NBER Chapters, in: Europe and the Euro, pages 11-51, National Bureau of Economic Research, Inc.
    4. Mr. Hernán Cortés Douglas & Mr. Richard K. Abrams, 1993. "Introduction of a New National Currency: Policy, Institutional, and Technical Issues," IMF Working Papers 1993/049, International Monetary Fund.
    5. Hal S. Scott, 1998. "When the Euro Falls Apart," International Finance, Wiley Blackwell, vol. 1(2), pages 207-228, December.
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    Cited by:

    1. Benjamin Born & Teresa Buchen & Kai Carstensen & Christian Grimme & Michael Kleemann & Klaus Wohlrabe & Timo Wollmershäuser, 2012. "Withdrawal of Greece from the European Monetary Union: Historical experience, macroeconomic consequences and organisational implementation," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 65(10), pages 09-37, May.

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