What if the Euro goes under?

[AngryAmish]

Some folks are saying the Euro might fail because of the debt crisis. I have no opinion on this either way and I frankly have no idea if this is a good or bad thing.

My questions is this: If I have 1000 Euros and tomorrow it goes kaput, what do I then have? Does all the money become worthless - I doubt that. DO I get a basket of currencies, say 100 Spanish Pesos, 20 Irish Pounds, a big bag of Deutsmarks, a pinch of Latvian...whatever Latvian money is? Or do I get to pick what I want - if I'm in Sweden then I get all Kronors?

Anybody know this answer?

[Pharaoh]

1. not a clue

wonder how that all works too. In reality it's all monopoly funny money.

[stevenleser]

2. I would assume they would do what they did when they introduced the Euro, in reverse

each country would start printing its currencies and would peg them to a certain Euro value or float them vs the Euro. The currencies would all be accepted together for a period and then the Euros would be discontinued.

[sinkingfeeling]

3. Uh, Euro is still worth more than US dollar.

[AngryAmish]

4. The inherent value of the Euro has nothing to do with it

Ireland or Greece or other poor countries borrowed a lot of money in Euro denominations. They have to pay it back in Euros. So they cannot raise that sort of scratch right now with their economies in the shitter. Ireland would normally be able to devalue their currency and pay back with deflated Pounds and make themselves price competitive through devaluation. They can't do that with a Euro, especially a strong Euro. The richer and more stable eurozone countries don't want to do that (would you like to have your savings worth 14% less because the state of Indiana could not pay their bills?).

So these countries might have to leave the euro to avoid crushing debt repayments. That is the problem in a very quick and dirty and probably somewhat wrong version. I'm open to corrects since I'm not a euro expert.

[AngryAmish]

6. test

[Cali_Democrat]

5. You would be holding a nearly worthless currency that could be exchanged

I don't think the value would go to zero because of so many European and world assets priced in euros. But eventually you'd want to exchange them for dollars, yen, Kronors, deutchemarks, etc. This assumes the other currencies are floating freely. The euro countries could peg their reintroduced currencies and you would get that exchange rate.

You could exchange it for whatever you want depending on the prevailing exchange rates at that time.