The bank runs are already seen as a foregone conclusion by the Greek government — and are already happening, which is why you see a war on cash. This is also occurring not only in Greece, but other nations. If cash is irrelevant banks cannot go broke because there is no physical liability owed by these same banks.
Please see the following posts for examples in the war on cash:
Greece is completely out of money and time is running out to save it from bankruptcy.
The cash-strapped country urgently needs an €7.2billion (£5.6billion) bailout loan to stay afloat, but so far it has been unable to reach an agreement with EU creditors over the terms attached to the cash.
Until Greek and European leaders reach a lasting solution to the crisis, Greece’s future inside the eurozone looks highly uncertain and a so-called ‘Grexit’ a strong possibility.
In the short-term Greece faces a number of debt repayments in June to the International Monetary Fund.
The first is a €300million (£216million) payment scheduled for Friday.
So what happens if Greece does not pay back this cash or any of the other repayments that it is required to make?
No one knows exactly what would happen if Athens were to default but it would likely cause a knock-on effect leading to a chain of events that could spiral out of control.
One of the first outcomes of a Greek default is likely to be a run on the banks, as ordinary people, businesses and investors lose confidence in economy and move to get their cash amid fears national institutions will go bust.
However, a bank run is a self-fulfilling prophecy as banks need customer’s cash to keep functioning.
If savers attempt to remove all deposited cash all at once, a bank will indeed go bankrupt.
In this event, the government may close banks to stop withdrawals or impose fees or charges.
Back to the drachma
If Greece defaults on its debts, it is almost certain that it won’t be able to stay as a member state of the eurozone and will have to leave the euro.
This would likely mean a return to its previous currency the drachma.
Greece is already struggling to cope with waves of immigrants landing from Africa and crossing through from Asia.
If it’s economy is plunged into further crisis, it’s unlikely to have the resources to cope with influxes of people and could quickly find that it is overrun by illegal immigrants.
This could cause crime and create further social unrest within the country.
Full article: What happens if Greece defaults? (Express)