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The problem (or one of them) is that if the euro splits up into many separate currencies, the values (exchange rates) of those currencies are probably going to
by mellis 15y ago
The problem (or one of them) is that if the euro splits up into many separate currencies, the values (exchange rates) of those currencies are probably going to fluctuate greatly. This causes all kinds of problems for governments, banks, companies, and even individuals as the value of your debt, the cost of supplies, the price of your exports, etc. all change dramatically.
- philwelch 15y agoIt's possible to split up the euro the same way it was put together: peg the national currencies to a pseudo-Euro for a transitional period. There might not be enough time for that to work in a crisis, though.
- maaku 15y agoThat's not a problem, that's the entire point. The PIIGS (Portugal, Ireland, Italy, Greece, Spain) switch to national currencies, print money to pay their debt, and suffer the effects of inflation. That's precisely the mechanism by which a breakup would 'solve' the euro crisis.