Right now it's legal to transfer euros out of Greece, so it isn't smuggling. The smuggling issue arises if/when Greece announces currency exit and declares all euros within its border to be drachmas. They can do that to all the euros in the banks, but its not so easy for all the euros in private hands. Here's an historical example...
The demise of monetary unions past: Austro-Hungary 1919
efinancialnews.com
There were, however, variations in how currency holders were treated. The South Slav federation of Serbs, Croats and Slovenes, for example, kept 20% of the crowns they stamped and put them into government bonds – in effect, a forced loan to the new government.
Czechoslovakia followed a similar path, requiring citizens to put a portion of their cash into government bonds in return for stamping the rest, while Austria focused on preventing capital flight, freezing 50% of deposits during its own stamping process.
After a period using the stamped crowns, each territory converted them into new currencies in 1920.
Hungary, however, put a spanner in the works – and in doing so may offer a lesson to the eurozone – by retaining the old crowns as legal tender into 1920.
With the old crowns trading more strongly than the new crowns issued in neighbouring Austria, the latter’s citizens sought to smuggle their money across the border into Hungary, opening a simple arbitrage opportunity until Hungary too stamped its currency later in the year. |
