I mean that if you get a paycheck in Drachmas, and the Drachma drops in value, your paycheck is effectively gone down when measured in euros. You can get the same effect by keeping euros, and just lowering the amount. The difference is psychological. People don't like it when the number on the paycheck drops. They don't mind it as much when the number stays the same, and the currency drops by an equal amount.
No it is not psychological, you are forgetting a few details:
- If you own the bank $$$ Drachmas and the Drachmas drops in value, the amount you own also drops, while if you drop your paycheck and the $$$ amount you own the does not drop YOU are literally worse off.
- If you are rich and have a lot of Drachmas and the Drachmas drops in value, you are literally worse off. On the other side if If you are rich and your employees take a pay cut, that is good for you.
- Also, when the Drachmas drops in value the German cars become more expensive and the Greeks will buy less of them while some local goods keep their relative price. That is not good for Germany. Worse, some other EU countries can get the same ideas...