Athens has lost access to bond markets and international creditors are not willing to lend it more money until it starts implementing reforms. An official familiar with the matter told Reuters this week that without fresh funds, the government will run out of money by April 20.California Gov. Pete Wilson used a similar device in the State of California once. (Virginia Ellis and Carl Ingram, IOUs for State Workers Broke Law, Judge Says Los Angeles Times 12/03/1992)
"At some point, when the government has no more euros to pay salaries or bills, it might start issuing IOUs -- a paper saying that its holder would receive an x number of euros at a point in time in the future," one senior euro zone official said.
"Such IOUs would then quickly start trading in secondary circulation at a deep discount to the real euros and they would become a 'currency', whatever its name would be, that would exist in parallel to the euro," the official said.
Although Pete Wilson's having done it is hardly a reference for it being advisable! Which may be part of why anonymous eurozone officials are floating the idea. (See below.)
Strupzewski's article does make it clear that Greece has good reason to make sure that any Greek default on its debt happens while Greece was part of the eurozone. Finance Minister Yanis Varoufakis has previously discussed such an option:
In a video from 2013 when he was still an academic, Varoufakis made exactly that point.That "stick the finger" ("flip the bird," in Americanish) quote is the one that became so embarrassing to the German "quality" press over a victory of that passage in Varoufakis 2013 speech in which a satire site doctored to make it look like he flipped the bird as he said it. (See my post, Is the German press having its Jeff Gerth moment? 03/18/2015)
"My proposal was that Greece should simply announce that it is defaulting within the euro in January 2010 and stick the finger to Germany and say: well, now you can solve this problem by yourself," the future minister was filmed as saying.
The big question then would be if the European Central Bank would then continue to keep the Greek banking sector liquid through its Emergency Liquidity Assistance (ELA) that is designed only for viable banks that have liquidity problems.
If the ECB pulled the plug, the Greek banking sector would most likely collapse, forcing a recapitalization in the new "currency" or, if the consequences of such a collapse were to dire to contemplate, the euro could agree to again recapitalize the banks, possibly even through its bailout fund ESM.
Yannis Iannou's 03/20/2015 cartoon "Eurofinger" shows the EU and ECB flipping the bird to Greece:
The Greece-Germany standoff is generating the kind of rumors, speculation and disinformation one might expect. Keep Talking Greece reports in a post mainly devoted to the Reuters story (No Grexit, No Grexident. The IOUs are coming ...!? 03/28/2015):
It looks as if the IOUS-option is not even [being] informally discussed among the euro zone officials. Most likely, they just create scenarios to increase the pressure on Greece.
Of course, the euro zone officials did not forget to mention to Reuters the possibility of capital controls, as well.
Some German finances websites went even so far to upload articles for the sake of articles and scaremongering with the creative titles: Facts check – Capital controls in Greece already as of this weekend?
After two paragraphs and 300 words, the author comes down to the real world away from social media, realizing “that there is nothing about it, excepts some tweets claiming this.”
PS double *sigh*