Instructions have been given to British Consulates. The FO decline to say what those instructions are, fielding enquiries to the Treasury who say blandly that the UK government is well-prepared for any eventuality.
Behind the scenes, Whitehall’s first priority is contingency planning. The Government is now operating on the basis of an expectation that the single currency will come apart, but is hoping it doesn’t happen soon: “The eurozone was a mad idea,” says a senior minister. “It will break up. But so terrible would be the impact that we think it’s worth them having a go at keeping it together.” In the meantime, the Foreign Office is focusing on trying to prepare the machinery to help Britons who might be stranded abroad if banking systems and cash machines go down.
There is also the potential for social unrest: embassies and consulates have been told to prepare for a flood of inquiries and requests for help if the euro stops working in some countries and other currencies have to be introduced (there are a million Britons in Spain alone). Fortunately, the government can keep liquidity flowing at home in an emergency, thanks to the UK retaining its own currency.
http://www.telegraph.co.uk/news/worldne ... apses.html
MyBulgaria members will of course wish to be well prepared for any eventuality as well and that probably means assuming that ATMs and Banks can be shut any time, though over a weekend or a long holiday would be the favourite.
So hold more cash. What cash do I hear you say? Well, actually there is nothing wrong with the Euro as cash at the moment, it is a big currency backed by a Central Bank with a printing press (or rather national printing presses at their disposal) and a mandate to limit inflation. Use of the Euro is irrevocable by Eurozone member states. So it ticks all the right boxes.
The problem is that the use of the Euro has destroyed the economies and hence the credit of a significant number of its members. Those sovereign states and banks from the Eurozone and further afield are locked in a dance of death. The existing Euro Treaty law cannot provide a solution. As Obama says, "Who do I call?". The two or three sources of EU bail-out funding are inadequate. They cannot be leveraged because foreign investors don't fancy them. They depend on large contributions from the sovereign states that are on the point of forced default.
The buses and trams will probably continue to run if a country defaults. The problem is that the banks will collapse as many of their assets will have been rendered worthless, even thought they have already swapped as much of their junk as possible at the ECB hock shop.
Unlike the useless EU elite including the irritating squeaking Portuguese fellow and the Mekon like Van Rompuy, national states have the duty to govern. They will close banks, seal borders, try to stop capital flight, secure food supplies. They cannot leave the Euro without leaving the EU. Leaving the EU would be disastrous for them. So the emergency measures would remain in place for weeks while their national leaders tried to work out a solution in Brussels, surrounded by rioters.
The most sensible and least disastrous solution would be for Germany, France and Benelux to leave the Euro and start a new one. They would probably have to do this outside the EU Treaty framework because to expect 27 Member States to act quickly without using vetos is fanciful. In fact Germany and France have probably worked out what to do already and are waiting for the collapse. Breaking the EU Treaties wouldn't bother them, they've done it before and, in their own minds, they are "Europe". French troops were the last suicidal defenders of the Reichstag in 1945. France and Germany are responsible for the present situation because the Euro was their idea.
That would leave everybody else including the famous PIIGS with the Euro and the ECB. They could pay all their debts legally with the Euro, which would then have fallen of course. In this viable, reduced Eurozone they would probably be able to continue without catastrophic drops in production and would probably even be able to attract finance for their public debts and sell off or recapitalise their banks. They could pay back the new Eurozone legally in devalued Euros. Some countries might decide to have two currencies. The EEC functioned like that for years with the ECU, the Green Pound being one common currency we are in.
The new Euro would go up a bit. One bank's research department estimates 25%. The smaller Eurozone members might or might not decide to join it and the French and German lawyers would have a lot of work in arguing which money should apply to assets and liabilities and how to exchange or overprint the currency. They would still have access to the single market (and vice versa) though their exports would be more expensive and their imports cheaper. It would be more practicable for them to invest in the reduced Eurozone than producing at home.
Where would this leave Bulgaria? Well I imagine they would stay true to form and stick with Germany thus making Bulgaria even more expensive, particularly for Brits on pensions. It would also ensure that there was no exchage rate advantage for the new Eurozone to invest there thus gaining another self-inflicted wound. Its banks would have gone bankrupt and been nationalised and/or sold off as well.
The EU made up of 27 Member States would continue as before. A bonus is that they might decide not to let the Croats in so the unpleasant arch fascists, torturers and Hitler worshippers of that immature little country would have to live with rejection . Every cloud has a silver lining.
So stay cash rich, pounds, dollars or SW fr, IMHO. And register with Carlton-Browne.
If you think the collapse is not going to happen tell me why. The only reason I can think of is a new Marshall Aid plan (gift, not loan). But I can't see the US taxpayer wearing that. More likely, if you think it's going to happen but not quite yet, give me a guesstimate!