With recent election results demonstrating many Greeks want to back out of the country’s Eurozone agreement, financial analysts say the drachma could return to Greece soon.
Following three years of economic struggle and several bailouts totally nearly $800 billion, Greece could reinstitute its old currency should they pull out of the Eurozone.
Hartmut Grossman, an analyst at ICS Risk Advisors, said these plans have been in place since Greece’s first major debt crisis in 2009.
“A lot of the firms, particularly in Europe and also here, have been looking at that for a long time,” he told Reuters. “But there really has been contingency planning at all of the financial institutions for that to happen … Greece leaving the euro zone is not a new idea.”
For their part, the European Union said it wanted Greece to stick with the euro, a multi-country common currency.
According to an article written for the Associated Press by David McHugh, the “great fear” is that if Greece leaves the euro, other troubled Eurozone countries may follow suit.
If the country does return to the drachma, however, it is not a process that can take place over night.
Before banknotes can be processed, they have to be designed, developed and equipped with security features to prevent counterfeiting. These elements must be assembled before being shipped to the paper maker, which can take three to four months. After that, the notes are sent to the security printer who must undergo at least six to eight different processes to get the notes ready for circulation.
Even in the case of a crisis, the minimum time frame to introduce new banknotes into circulation is close to a year.
Reuters: “Banks Prepare For The Return Of The Drachma”
The Chronicle Herald: “Greece’s Exit From Eurozone On The Table”
The Globe and mail: “Can Printing New Currencies Keep Euro Zone United?”