Talk of Euro abandonment would trigger an immediate run on Greek banks, sending the country into an even deeper hole. Who wants a Euro deposit to be converted into a drachma deposit?
You could imagine keeping current Euro-denominated deposits and adding new drachmas to the system, circulating at a flexible exchange rate. That still might trigger a bank run (who expects the parallel currencies to last forever?). Furthermore the new drachmas would bring seigniorage only if the law forces their overvaluation in some manner; refer back to the earlier discussion of the bank run.
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Photo: Drachmas
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