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REVEALED: The Date Greece Will Begin Printing Drachmas


Our expert breaks down the conditions and timeline of the Grexit.

MINYANVILLE ORIGINAL Will the Greeks leave? Will they do it on their own? Will they walk out? Get carried out? Get tossed out?
Lots of can-kicking has led to the point where not much more can-kicking is possible. So let's talk not about if they leave, but try and work out when.
I think this exercise is a bit like planning for D-Day. You need a combination of factors that are seasonal and recurring to come together to give the conditions you want to get done what you need. Some of those factors:
1. A functioning government in Greece: You can't ask a country to leave without having someone to accept the message.
2. Time to plan: I'm assuming Greece needs no less than 15 days to finalize all the prep that is undoubtedly going on now.
3. Time to print: Those drachmas aren't going to fall from the sky.
4. A market window to execute the cut over.
The timeline below will be vastly complicated by the fact that the cat will be out of the bag about 10 minutes after the first meeting. In our 24/7 news cycle, hyperconnected, tweet-a-second world, nothing stays hidden for long, especially anything that has a large number of parties who are vigorously pursuing their own interests and agendas.
Here's the hypothetical timeline:
June 17 to June 24 – Greece votes and forms a functioning coalition government (condition 1 met).
June 25 to July 15 – Greek politicians spend a couple weeks doing a lot of talking about getting a new deal; European politicians outline that they are about to get cut off.
July 15 to August 15 – Plans are finalized for Greece to cut back over to the drachma (conditions 2 and 3 are met).
August 15 – Greece and Cyprus (who has much at stake here) have a scheduled market holiday. This holiday is a Wednesday and I project they close the markets on either the two days before or after the holiday and complete the cut over then. That gives five days to effect the conversion and allow the markets to further digest the events.
I suspect the "renegotiation" phase with the new Greek government may take a few more weeks before the moment of recognition sets in. However, the timeline still works if the "prep" window is smaller after recognition.
While this is going on publicly, a deal between the representatives in the EU room will get worked out. I believe many plans are being quietly worked on now and can quickly be stitched together.
My money is on Germany agreeing to eurobonds as long as Greece gets the boot ("…pour encourager les autres"). In the end, Germany is far too invested in a federalized Europe; walking away isn't an option. Germany gets control at a relatively reasonable price. The French get a growth option and the illusion of being in control. The Greeks get the boot and the EU moves forward.
Greece has little leverage other than the possibility of economic Armageddon. Missing in any of their proposals are steps that will solve their economic issues. They have cried Armageddon (otherwise known as "cried wolf") too often now and I don't see their counterparts playing along much further. Ironically, they probably have the easiest road forward.

As Iceland shows, default and reorganization works and the window of pain is finite.
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