Under the plan, which the report said went back to before Tsipras was elected in January, transactions through the parallel system would have been nominated in euros but could easily change into
drachmas overnight, he was quoted as saying.
"This will naturally bring the economy to a standstill unless a new fiscal bail-out package is offered or Greece returns to the
drachma. Since it is foreseeable that negotiations over another bail-out package will only waste more time, without a successful outcome, Greece should introduce a new currency," argued Sinn.
If exit was inevitable, the ECB would surely accept the need to support a fixed exchange rate to the euro because a hyper-volatile
drachma and an unstable Greece are in no-one's interest.
Based on Bank of Greece figures, I estimate that the cost of applying this enhanced conversion rate for deposits would be 190bn
drachma or [euro]95bn with another 70bn
drachma ([euro]35bn) to cover the mismatch of banks' assets and liabilities that remained in euros because they are governed by foreign law.
Q: What if I've already got my euros ready to go and Greece goes back to the
drachma? A: You should still be fine.
The possible return of the
drachma due to its depreciation will make the Greek products even cheaper and our products more expensive and in this case, further decline of our export to Greece should be expected.
He proposed that Greeks hand in all their Euros and get
Drachma, the nation's old currency, in return.
Juncker said he looks forward "to a high participation of private creditors in the PSI (private sector involvement) operation and takes note of SP's intention to upgrade the lower ratings following the settlement of the bond exchange." SP noted that if Greece would leave the eurozone and re-introduce its former
drachma currency, its national bank would no longer be part of the European system of central banks and its long-term perspective would be even worse.
AFP ATHENS DEBT-WRACKED Greece will face a "real nightmare" if it forsakes the euro for the
drachma, its old currency, the head of the central bank said in an interview published on Saturday.
As the architect of the Greek transition from the
drachma to the Euro it will be his focus of attention to make sure the country keeps the single currency, despite the collateral damage of austerity measures.
Greeks understand that they would be cut off from the commercial mainstream of Europe if they were forced to return to their own currency, the
drachma. Such an exit would be messy; loans and other financial instruments denominated in euros would have to be converted to
drachmas at an exchange rate to be determined, and the euro would continue to be used as a parallel underground currency.