For years, financial analysts and political observers alike have been wondering about what the consequences of a ‘Grexit’, or, Greece leaving the EU, would be. Now that the Drachma has made its first appearance on receipts and other financial documents, it appears that this possibility is closer to reality than we had ever envisioned before. Indeed, in one of the most clear signs pointing firmly towards a Grexit, the ECB refused to raise their $89 billion loan cap, which has led to cash rationing amongst banks in Greece, which in turn, left Greece with only one option to prop up its financial sector; printing Drachmas. They are not legally entitled to print Euros. So in that spirit, let’s take a look at a couple of scenarios for what could very soon be the new reality (or not) of an independent Greece.

Best Case Scenario: Many, including Paul Krugman and Joseph Stiglitz believe that leaving the Eurozone would cause Greece short term pain that would be worth it in the end. The Drachma would almost certainly be drastically devalued in the immediate-term, which would actually have a couple of positive effects on some portions of their economy (cheap olive oil, or Mykonos vacations sound nice to anyone out there?). On the other hand, bank accounts would be depleted while they were converted to less-valuable Drachmas. But over time, a light at the tunnel would develop. Advocates of this scenario, those who think they should leave, state that the country would remain around 25% unemployment under strict austerity terms, if they stay within the EU. However, the only historical model to really point to in terms of a country defaulting on its debts, is Argentina, which has posted mixed, but also many years of positive, economic results in the time since they did.

Worst Case Scenario: There are a lot of factors working against Greece if they do decide to leave the EU, and execute a currency change. Greece is not a large exporter, and is not necessarily poised to become one as Argentina was able to. Even the now-departed Greek Finance Minister Yanis Varoufakis stated that it would be hard for his country to mimic the export success of Argentina, which produces mass amounts of agricultural products. Also, the debts to the EU do not necessarily disappear, even if the Greek government decides to stop paying them. And paying them off in devalued Drachmas would prove even more difficult than it is now.

Truly a tough situation our Greek friends find themselves in. Check back here on the Daily Aggregator for more updates as this unique international story develops.