If Greece left the eurozone and returned to the drachma it would initially go through real hell. This assessment is not a scenario of some science fiction film nor is it created by the people who want to scare taxpayers, but it is a reality that must be seriously taken into consideration by all Greeks, politicians and citizens, and everyone must do their utmost to avoid such developments.
Shortage of goods
One of the first consequences in the case of giving up the euro would be the shortage of some basic imported goods. Fuels, medicines, foodstuffs, raw materials for industry. A direct consequence of this would be the lack of police control, which would probably cause a risk to the national security. These are just some of the consequences of such a nightmare scenario.
Given that Greece, unlike Argentina, imports almost everything, it is clear that at least for a long period of time which could last from 6 to 12 months, Greece would not be able to import anything, or to be more precise, all imports would be achieved with "blood, tears and sweat."
In this environment, reminiscent of Dante's Hell, the only winners would be those who have had money or have been operating abroad, because over night their power would increase many times.
Who would be the people to suffer the most losses? All Greek citizens and particularly those with low incomes, because they would see their purchasing power shrinking by 50% or even 70%. On the other hand, for some time they would be forced to use goods or personal belongings and property to obtain vital goods, as with the introduction of the drachma, the economy would return to exchange trading.
Emigration of, mainly young, people would also increase and there would be phenomena similar to the events in Russia and Bulgaria immediately after the fall of communism in the '90s.
Today's salary: 1,000 euro
Petrol: 588 litres
Oil: 660 litres
After the return of the drachma
Salary: 340,750 drachmas (Salaries would be exchanged according to the initial rate)
Petrol: 367 litres
Oil: 416 litres
There might be a possibility to print money, but this would not last indefinitely. Therefore there must be a primary surplus from the very first night, when the drachma is returned. Reforms must be accelerated, and they would naturally include layoffs of state employees and reduction of social benefits.
Strong demand for money would force banks to close down for some time and go under state control. Interest rates on loans would be sky rocketing and virtually no company would have access to bank credit, because with an interest rate of 30% -40% this would not be advisable.
A large number of companies would go bankrupt because they would not be able to meet their needs, neither in terms of imports of raw materials nor in repaying their loans, which would either remain in euro or would be converted into drachmas, but at a later stage when the exchange rate would already have stabilized.
Citizens would rush to withdraw their deposits from banks, but this would not be possible. Banks would close down, and perhaps the army would be mobilized to protect them. Gradually the access to bank deposits would be restored, but they would be in drachmas. There would be currency restrictions, so it would not be easy to export money abroad, even for serious needs such as treatment or studying.
Nightmarish picture of the future
When changing the currency of a country this takes time. According to estimates, but also given the experience with the euro, it would take nearly two years for drachmas to really appear. What does this mean? In the intervening period the drachma would be used in the form of accounting records, but actually the euro would be used (but the Greek banks would not grant it) and barter trade would prevail. For example one litre of oil would be swapped for a kilogram of meat.
Prices of goods and services
Inflation would be "galloping". It is believed that initially, until things normalised, it would be around 50%. Prices in the morning would not be the same as those in the evening, and that's not a metaphor.
It would take a long time until the exchange rate of the drachma and the euro stabilized. It is believed that this period would last from six months to one year. International organizations believe that the devaluation of the drachma as compared with the initial exchange rate at the time of the introduction of the euro in Greece would reach 60%, or maybe even more. That is, one euro would be traded for 550 or 600 drachmas. Others, who are even more pessimistic, expect it would reach 1,000 drachmas. (At the time of the introduction of the single currency in Greece, one euro was traded for approximately 347 drachmas).