Observer
November 6, 2011
Banks shut their doors. Supermarket shelves empty. The rich stuff their suitcases with dollars and head for the border. The middle classes abandon their offices and join the street protests. The president flees by helicopter from the roof of his palace.
There is no script to follow when a country goes bust, but as Greece stares into the abyss that would open up if it left the euro, the gravity of the situation has prompted UBS's Stephane Deo to quote Keynes: "Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency."
Deo added: "If a country has gone to the extreme of reversing the introduction of the euro, it is at least plausible that centrifugal forces will seek to break the country apart... monetary union break-ups are nearly always accompanied by extremes of civil disorder or civil war."
The only certainty for a stricken country is a run on its banks. When Argentina went through this painful experience a decade ago desperate individuals took to sleeping in front of cashpoints so they could withdraw money as soon as the machines were refilled.
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