I thought that was an excellent, well written and entertaining article. Well worth the time if you are interested.
To me the only solution is to remove themselves from the EU and go back to their own currency. And for some type of structured devaluation of their existing debts to gradually -rather than overnight- allow the other european banks to write off the losses. Though I'm not sure how you could get it to work out in practice. But the inflation rate and deficits were all a sham, I'm sure they can come up with some sort of sham valuation on untraded paper.
They thought about this. What happens is that there is no way the devaluation could become "gradual".
Imagine being Greek and having all your live savings in the bank, in euros, and tomorrow they become drachmas and in the process losing 25% purchasing power. What do you do? You sell all your drachmas and buy euros or dollars because you know drachmas are going to be even less tomorrow.
It doesn't matter you make it illegal, people is going to do it anyway. This is what happened in Argentina, nobody wanted pesos, they wanted USD. People stopped using banks(this way the government has less power over your money).
Also, people feel enormously betrayed when they realize their hard earned savings become nothing and politician heads roll down, so politicians try to delay it as much as possible. IMO it will happen sooner or later anyway, unfortunately because they were in fact betrayed.
A currency is "legal tender" because a government will accept taxes in it, so in practice everyone has to have it, and use it for their own commercial activity.
But in an economy where no-one pays taxes anyway...
I was thinking more of the debt rather than the currency. My point of view wasn't so much the Greeks but the european banks with exposure to Greek government debt. I was thinking along the lines of an ECB fund that assumed responsibility for the debt, froze trading in it and gradually reduced the value somehow.
But as you say, once the Euro is dumped whatever replaces it is going to be very unstable.
All in all, it's a good warning against the evils of excessive government spending and endless deficits.
To me the only solution is to remove themselves from the EU and go back to their own currency. And for some type of structured devaluation of their existing debts to gradually -rather than overnight- allow the other european banks to write off the losses. Though I'm not sure how you could get it to work out in practice. But the inflation rate and deficits were all a sham, I'm sure they can come up with some sort of sham valuation on untraded paper.