For Greece It's About Confidence Not the Euro

Bring back the drachma! Let Greece drop out of the euro for a while and give the Greek economy the chance to recover. Back to the good old days of soft currency and depreciation ...

Riot police and protester clash around recycle bin during demonstration at anti-austerity rally.

I've heard this mantra chanted by die-hard "one-size-fits-all-doesn't-work"-ites a trillion times before and I can't say that I believe it any more than the first time.

First of all - you just have to love the "let them drop out for a while" part. As if THAT were such an easy feat - both in terms of logistics and physical costs. Never mind the utterly incalculable political, economic and financial market collateral damage.

But let's just play this "back to the drachma for a while" through ... The Greeks have a problem. Not for the love of God or money they can sell their fully guaranteed Eurobonds to the discerning investor right now. Not even at a 14 percent or more penalty rate to comparable German bonds. As a consequence, they're staring down the barrel of a default gun.

So ... The master plan is: abandon the euro (because we can't pay back our debt anyhow ... And let's worry about that later, eh?) and start printing nice new drachma notes. And all will be just fine!

Oh, really? How? ... Will the same investors that didn't even want to buy guaranteed Greek Eurobonds suddenly start buying drachma bonds that are guaranteed by whom? Of course! By the Greek government. Why didn't you say so. Then that's definitely safe, hmmm?

And even if some reckless and "no risk no fun" prone investors might be tempted to put their hard currency into feta-soft drachmas, at what yield? Certainly not the 17 percent of the Greek Eurobonds. What then? 25 percent? 30 percent? 40 percent? Your guess is as good as mine.

And THAT will then consolidate Greek budgets? And make the economy sharp and competitive? Dream on!

Dropping out of the euro - for a while or forever - would be political, economic and financial suicide. The collateral damage to the rest of the euro zone and the EU and Europe as a whole would be totally unpredictable.

And all those "drop out of the euro"-ites always blithely ignore the main issue: Greece has a confidence crisis. Confidence of its citizens in all its politicians. Confidence of the markets. Confidence. Period.

The label of the currency is utterly immaterial right now. Whether in euros, drachmas or duckville ducats, the Greeks have to regain the confidence of investors. And if I were Greece, I would try to stick with the euro.