While the fear of contagion may exist, namely that other peripheral Eurozone economies would see heightened risks of such a path, markets are reacting calmly. This either presumes the likelihood of a last minute deal (my preferred conclusion) or an acceptance of the economic ramifications. Already determined pressure exists within the Eurozone from such countries as Ireland, where austerity programmes have been undertaken successfully with effective economic recovery seen. At present, I would reiterate the uncharted territory for the Eurozone in seeing a member state leave and I would favour a last minute solution. The extent of the cuts being required by the European powers are de minimis compared to the tourism income that would flood in should Greece devalue so, civil unrest aside, the path to recovery here is painful, but not inconceivable.
18 June 2015
Greece - potential exit from Eurozone
Faced with an inability to service its debt levels, the Greek economy faces the traumatic and unprecedented possibility of leaving the Eurozone

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