Rumours of Eurozone break-up are mounting. This column argues that exiting a strong currency for a weak one poses almost unthinkable challenges, from the redenomination of contracts and the imposition of bank restrictions to the restructuring of external debt and limiting of capital mobility. Lessons from Argentina illustrate just how radical the changes would need to be.
The article is broadly in line with what Eichengreen has said in this paper. Argentina still could manage as pesos were still in the system. With Euro, it is all the more complex.