Will We See a Grexit and the Return of the Drachma?

Posted by Allison on 23 February 2015, 14:26

A new government in Greece has changed the situation the country is in with the Eurozone. So much so in fact, many people are considering the prospect of Greece leaving the Eurozone and dropping their use of the euro as well. This is called a Grexit – a portmanteau word basically referring to the possibility of a Greek exit. But would such a major event happen?

Moreover, if it did happen what would Greece do for money? Before the euro came along they relied on the drachma as their national currency. It would make sense to go back to this if they could no longer use the euro. Those in charge in Greece, who have recently been voted into power, are speaking strong words in terms of their position within Europe. At the moment there is a stalemate in terms of the situation between the European Central Bank and the Greek government. Neither is willing to back down and allow the other to take the bigger degree of control.

No one knows quite what will happen. Will we see Greece become the first country to exit the Eurozone, albeit in what could be a disorderly fashion? Would they carry on using the euro until they could launch the drachma once again? No one knows how things would pan out. However we could get answers sooner than we may think. Some believe we are just days away from finding out whether there will be a Grexit or whether the country will stay within the Eurozone.

Many people are questioning what will happen – and many Greeks have already started to withdraw funds from the banks, just in case. No one wants to leave their money in accounts that may be inaccessible in just days from now. No one knows what will happen but if a Grexit does occur it could occur very quickly indeed.

Imagining a world where the drachma comes back into use would be good for some. And in a more severe case, if Greece did leave and re-introduce their own original currency, would they be the first of several to do so? We shall find out in due course.