According to the German Handelsblatt, German Finance Minister Wolfgang Schaeuble suggested the issuance of IOUs in Greece, during the Eurogroup, held on Sunday, July 12.
Schaeuble is continuing to play in the “game” against Greece. After proposing the five-year Eurozone time-out for Greece, he also proposed that the country issues IOUs, otherwise known a registered warrant, as a form of bonds instead of euros.
Handelsblatt, noted that during the Eurogroup meeting, the German finance minister suggested to other Eurozone finance ministers the use of IOUs, in order for Greece to receive bridge financing to serve part of its internal obligations. For example, the IOUs may be used to pay wages and pensions.
The use of IOUs is controversial, with some experts stating that is the first step in a parallel currency situation. This method is suitable only for internal payment obligations, such as bills and wages, and cannot be used to pay the country’s debt to the creditors.
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