1. Canada prints up 17 batches of banknotes. The first batch is called "New Drachmas"; the second batch is called "New Liras"; etc.; and holds them till D-day.
2. Canada prints up one batch of very good counterfeits of Euro banknotes, and holds them till D-day+365.
3. The 17 Eurozone governments jointly announce D-day. Canada delivers the 17 batches of banknotes, one to each Eurozone government.
4. Each Eurozone government then announces that henceforth, all its existing creditors, and all its banks' creditors, and all creditors of its domestic debtors, have the option of having their Euro debts converted at par into its domestic New Drachmas, (New Liras, etc.). Or, they can continue to have their debts paid in Euros, if they wish. They have one year to convert existing debts. Existing Euro banknotes are included in the offer. (Each Euro banknote is technically a liability of one of the 17 countries' central bank.)
[Update: to try to make this clearer, that means that Greeks' debts can be converted into New Drachmas, Italians' debts into New Liras, etc. How exactly we define who's "Greek" and who's "Italian", I will leave to others.]
5. The Canadian government promises that on D-day+365 it will release the counterfeit Euros into circulation, in massive quantities if need be, until the exchange rate of the Euro drops below par for each of the 17 new currencies.
6. The 17 Eurozone governments agree not to prosecute Canada for doing this.
7. Alternatively, steps 2, 5 and 6 could be replaced by the European Central Bank promising to do what Canada promised to do, if it has the credibility.
This was inspired by Tyler Cowen's plan. But I think my plan is better. Just another worthwhile Canadian initiative.
Worthwhile Canadian Initiative 
The law would have to treat unpaid bills, and contracts signed before D-day and payable after D-day, like debts. The creditor would have the option to insist on payment in the debtor’s new national currency, and would want to exercise that option.
Yes, it’s a wealth transfer, relative to the status quo, but the status quo, especially if it involves (local) disinflation, is also a wealth transfer, relative to what was expected, as is default. Almost any solution will harm some creditors (those holding safe Euro assets). But the taxes to pay for the bailouts would harm those same people anyway.
“All Italians, Spaniards, Greeks and whatnot will race to their local bank and withdraw Euro banknotes. They want to bring this cash with them up to Germany so as to deposit it in the German banking system so they can get New Deutsche Marks.”
Totally ridiculous, have you ever been in Europe. Do you really think that spanish in Spain will travel to germany to deposit money in German banks. Not only one probably.
I think in North america you have o vision where business and money are too important.
Have you ever really mith a spaniard ? People will not react like that, they won’t react at all anyway.
yep, definitely a wealth transfer either way (and I’m happy to assume that the status quo is govt. debt default, just for concreteness.)
That’s not to say that the size of the transfer is constant across alternatives, or that we’re indifferent between any two sets of such transfers. Trying to figure out which transfer to choose is beyond me…..
But I think you nicely solved the bank run problem.
If economists spent half the time considering how to manage the existing experience-based money systems wisely that they now spend devising ever more convoluted ways of cheating holders of nominal claims for one last farewell performance of the moral hazard show, we might never have had these problems in the first place.
Nick, if you clean this up a bit and make it look more formal, you might get a big pay cheque out of it. “Economists offered cash for eurozone exit-strategy”