Much confusion comes from the idea that “a single currency” is a straightforward, normal state and “exit” from it a dramatic rupture.
Ensuring that claims on all banks are treated as equivalent is a utopian dream even in a single political unit; it requires constant intervention to even approximate.
“Greece” is simply the label currently put on the underlying contradictions of euro project.
Whether Greece” exits” or not, that project remains allowing unlimited financial flows based on the unanchored expectations of financial markets…
… and then demanding that real productive activity and standards of living adjust to accommodate them.
Since this would destroy society if really adhered to, the system is buffered with offsetting public flows, on conditions set by unaccountable authorities.
There is no sense in which default “leads to” exit. Creditors will attempt to force exit, as punishment for default.
Greek default will stress banks throughout Europe. In response ECB says it will increase liquidity for non-Greek banks, cut off liquidity for Greek banks.
Recall that in 2011-2012, sovereign debt yields reached 7% in Spain and Italy, 12% in Ireland, 14% in Portugal. Certain default if they had stayed there.
Rates fell only after ECB intervened in markets & explicitly promised to prevent defaults. ECB commitment convinced private holders to accept lower yields.
ECB continues to support markets for sovereign debt of countries other than Greece, in order to keep them at small premium to German debt.
Recall that after 2011, Spain and Italy both accumulated Target balances that dwarfed official aid to Greece…
… in part because ECB loosened collateral requirements for banks there. Meanwhile, collateral requirements for Greek banks have been tightened.
If ECB treated Greece the same as Spain, Italy etc, there would be no crisis. With “whatever it takes” guarantee, markets would be happy to hold Greek debt.
If ECB treated Spain, Italy, Portugal, Ireland as they’ve treated Greece, those countries would have crises like Greece, including defaults.
There is a crisis in Greece and not the other deficit countries because the authorities have chosen for the crisis to be in Greece.