Friday, April 17, 2015
ECB examines possibility of Greek IOU currency in case of default
April 17, 2015
The European Central Bank has analyzed a scenario in which Greece runs out of money and starts paying civil servants with IOUs, creating a virtual second currency within the euro bloc, people with knowledge of the exercise told Reuters.
Greece is close to having to repay the International Monetary Fund about 1 billion euros in May and officials at the ECB are growing concerned.
Although the Greek government has repeatedly said that it wants to honor its debts, officials at the ECB are considering the possibility that it may not, in work undertaken by the so-called adverse scenarios group.
Any default by Greece would force the ECB to act and possibly restrict Greek banks' crucial access to emergency liquidity funding.