The impact of a devaluation on the Greek economy depends on how much of the right productive capacity it has. 

The devaluation of the pound sterling since 2008 has not really helped the UK Balance of Payments current account. It may be that the UK has insufficient productive capacity OF THE GOODS THAT BRITISH AND OVERSEAS CONSUMERS WANT TO BUY. If the UK is not producing for example enough high tech products, devaluation is of minor assistance to its economy. This is the danger for Greece. Does Greece have, apart from tourism and shipping, enough firms that can produce the goods and services for which there is demand? I doubt it.

Concerning financial flows, I have numerous friends and family in Greece. If they are a good example, Greeks have lost so much confidence in their political class that even after a massive devaluation few of them will bring any money back to Greece.

David Fuller's view

Thanks for this informed comment. 

The UK was quick to soften its currency in 2008 and early 2009, and I believe this has been a factor in its moderately better GDP figures over the last few years.  Grexit would produce a much bigger devaluation, and I assume that would reverse the money flows, helped by some foreign investment in Greece.  However, that would not ensure a long-term solution to Greece’s economic problems, for the reasons you mention. 

This is probably an academic discussion since Greece, the ECB and IMF hope to avoid Grexit, not least as they hold the majority of Greek debt.