An article the Financial Post in February 2015 ( original article here ) suggested that the scenario for Greece leaving the Euro and returning to the Drachma would be as follows:
- Greek banks would clandestinely get word the country is abandoning the eurozone
- The newly pressed drachmas would arrive at various locations of the Greek central bank
- After three or four days of closures to convert the euros, Greek banks would reopen for business.
“It would happen, boom, like that,” according to Mr. Alex Jurshevski, who worked to restructure New Zealand’s debt in the 1990s and consulted with Iceland during its 2010 crisis.
Capital flight is the most pressing threat to Greece, and it’s already taking place. The closure of the banks this week with only tiny withdrawals allowed looks like a last-ditch attempt to stop everyday savers withdrawing their money. Paul Donovan, a global economist at UBS AG, said in an interview: “People just pull their money out of the banks and you get a collapse in the banking system and that then spreads to different components of the monetary union.”
If Greece switches currency, any euros left in Greek bank accounts would be converted to drachmas – which would cost account holders dearly, as analysts estimate the drachma would depreciate by 50% to 60% in a matter of days.
However with the results of the referendum not due for several days, there is little else the Greek government can do for the time being. Much also depends on the European Central Bank – and whether it believes it can still allow funds to flow, to prevent banks in Greece from collapsing.