IOU OR PROXY DRACHMA?

The political vacuum in Greece after May 6's inconclusive elections seems to have hastened a showdown where no government in Athens can deliver more budget cuts, so no more bailout funds are forthcoming and public money drains away, leading to mass defaults and a euro exit with all its wider ramifications. And if that's the will of the Greek people, then it may be tempting for all sides to try and manage the outcome as best they could. But nothing's that simple. Even though Greek voters rejected austerity in favor of anti-bailout parties, opinion polls show more than 75 percent want to stay in the euro. What happens when the cash runs out is the crux question. Greece will most likely need more outside funds from its bailout program before any new elections in June establishes a fresh mandate to secure further tranches of foreign money. So what analysts are homing in on is whether Greece can bridge any gap while still staying in the euro. 


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