Eurozone: If Greece goes …

Major analysis feature. With an exit of Greece from the eurozone looking possible following the inconclusive May 2012 general election, policymakers and investors are shifting focus to the consequences.

The idea of a Greek exit from the eurozone is no longer fanciful. After 70% of voters in elections on the 6 May 2012 supported parties that rejected the terms under which €174bn of international bailout loans were offered to Athens, many investors now see a fissure in the 17-member eurozone as increasingly likely. European governments are furiously thinking through the various scenarios, while still urging Athens to stick to its agreements on austerity and reform. If those hopes are dashed and Greece goes, what happens next?

The feature is the first part of a major series of features on 'If Greece goes...'.

Other features include:

+ Euro’s last turn before the Grexit
The eurozone has played chicken on austerity before and it tends to blink first. It must not do so this time – nor can the IMF allow it

+ Businesses brace for Greek exit
Some Asian and US groups say they will feel little impact from Greece leaving the euro while their European counterparts prepare for the worst

+ Lawyers weigh legal implications
As contingency planning intensifies, advisers warn companies should consider measures such as defining ‘euro’ in contracts as the currency Germany uses

+ Multinationals mitigate euro risk
Although most companies say the chances of a euro collapse are slim, many have been sweeping the single currency out of their accounts daily

+ If Greece goes ...: Little country threatens big impact
While some see a Greek euro exit as a chance to heal a wound and push on with integration, as many fear Greece could be just the first domino to fall

+ Portugal steels itself for Greek exit
Investors see Lisbon as next in line if Greece exits the euro bloc, despite its efforts to emphasise ‘political stability’ on reforms

+ Greek fire could singe rest of euro
Concern for many in the market is less the immediate impact and more the example it would set for other struggling eurozone countries

+ Greek bank-run threat splits analysts
Amid fears of a rush to withdraw money, analysts are split over just how serious the threat would be of bank runs in economies such as Italy and Spain

+ Arvind Subramanian: Greek exit may be the envy of the eurozone
The historical record – from Korea, Indonesia and Russia – shows clearly that there is life after financial crises.

+ A permanent precedent
An exit for Greece from the eurozone is likely to shatter faith in the eurozone's integrity for ever leaving the bloc with a choice between stronger union and disintegration, writes Martin Wolf.

ESO: Background information: Fear grows of Greece leaving euro http://www.europeansources.info/record/fear-grows-of-greece-leaving-euro/

ESO: Background information: The Greek debt crisis of 2010 http://www.europeansources.info/record/the-greek-debt-crisis-key-sources/

ECFR: Commentary: Two dangerous myths about a 'Grexit', May 2012 http://www.ecfr.eu/article/commentary_two_dangerous_myths_about_a_grexit34473

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