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According to an exclusive report by Reuters, the European Central Bank has examined the likelihood of Greece introducing a parallel currency in the event of a possible bankruptcy.

In particular, the ECB has analysed the scenario whereby Greece is out of cash and will be forced to pay its civil servants’ wages through the so-called IOUs. This will create a second, virtual currency within the euro area.

According to Reuters, senior ECB officials are concerned as in May Greece will have to pay about €1 billion to the International Monetary Fund. Despite repeated pledges by the Greek government that it will live up to its commitments, ECB top officials have been deliberating options in case the country proves unable to do so. An eventual bankruptcy would probably force the ECB to limit the provision of liquidity to Greek banks.

In this happens, ECB officials fear that Athens will be forced to pay state employees with the so-called IOUs.

"The fact is that we do not see progress being made... So we need to look into these scenarios," said a source from the bank.

Why this scenario cannot succeed

On the other hand, senior officials have explained to Reuters that they believe the use of IOUs for paying pensions and wages will not be able to avert the crisis; quite the contrary, it might endanger the country’s staying in the eurozone.

The same sources indicate that up to 30% of Greeks could accept the so-called IOUs instead of euros, but this would put pressure on banks as these people would rush to withdraw their deposits.

Subsequently, banks will be forced to increase the funds borrowed from the ELA (the facility for emergency liquidity assistance) or try to stock up on capital, but will not be able to use the IOUs as security in borrowing from the ECB as the latter wouldn’t accept them as collateral.

"I do not think the IOUs will work," the Reuters source pointed out. "This will be the end, they will slip out of the eurozone." Similar concerns have been expressed by other experts who are familiar with the ECB thinking patterns.

"With a parallel currency ... you have almost reached Grexit. This is something outside international frameworks," said the same source.

The news agency notes that "the Greeks insist that there is no plan to suspend payments, but, in a recent letter to Angela Merkel, Alexis Tsipras stated that salaries and pensions have priority over debt payments if the government were forced to choose."

The conclusions, which can be made from these ECB scenarios, corroborate the message that senior eurozone officials have long been sending to Athens: unilateral and radical actions are ill-advised.

The ECB have declined to comment on the publication, and Greek sources have stressed that such a discussion "makes no sense".