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Bankrupt Greece ‘Preparing IOU Currency’

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In a further sign its days in the euro may be numbered, the Greek government is considering introducing an “IOU currency” to boost liquidity while banks remain closed.

In the wake of last night’s decisive “No” vote, top Syriza officials told The Telegraph that “they are considering drastic steps to boost liquidity and shore up the banking system, should the ECB refuse to give the country enough breathing room for a fresh talks.”

Outgoing finance minister Yanis Varoufakis said: “If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it a week ago.”

Varoufakis insisted this would not be a prelude to the country leaving the euro but a completely legal action within the monetary union.

California issued coupons to pay bills to contractors after liquidity seized up during the Lehman Brothers crisis in 2008.

Varoufakis was due to hold an emergency meeting tonight with private banks and the governor of Greece’s central bank, Yannis Stournaras, however he stunned Europe by announcing his surprise resignation this morning.

He said he was standing down due to “a certain ‘preference’ by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement.”

There is now a serious split between Germany and France – the biggest and most powerful Eurozone members. The Germans have been briefing that Greece will not get another cent unless Tsipras stands down, but French President François Hollande saying he would do whatever possible to prevent Grexit.

French economy minister Emmanuel Macron said EMU creditors were equally to blame for the situation and should not “crush” the Greek people, but German Deputy Chancellor Sigmar Gabriel said: “With the rejection of the rules of the euro zone, negotiations about a programme worth billions are barely conceivable.”

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