3 Nightmare Scenarios When Greece Leaves the Euro

More

The consensus seems to be that we're way passed the world of If. When Greece leaves the euro zone, this is how the Europe's worst nightmares come true:

Interest rates skyrocket  Michael Arghyrou, senior economics lecturer at Cardiff Business School, has bad news for Greeks in need of a loan. "Interest rates will have to double and all mortgages, business loans and other borrowing will become much more expensive," he says. "There will be no credit for Greek banks or the Greek state. That could mean a shortage of basic commodities, like oil or medicine or even foodstuffs." Of course, that's not even the worst of it. "The worst case scenario would be a social and economic breakdown, perhaps even leading to a totalitarian regime," he says.

Bank runs spread to other countries. Bloomberg's Donahue says the threat to other European countries is very real. "A Greek departure from the euro could trigger a default-inducing surge in bond yields, capital flight that might spread to other indebted states and a resultant series of bank runs," he writes. "Although Greece accounts for 2 percent of the euro-area's economic output, its exit would fragment a system of monetary union designed to be irreversible and might cause investors to raise the threat of withdrawal by other states."

Greek citizens migrate en masse. In a chain of events, The Observer's Julia Kollewe sees Greek skilled labor exiting the country. "The depreciation of the new currency will make imported goods more expensive and drive up inflation," she writes. Mass unemployment is likely, as is an exodus of young skilled workers. If tens of thousands of Greeks headed to the borders, they might even be closed. Greek soldiers patrolling the roads and ports to keep their fellow citizens in? It is not impossible."

Read the full story at The Atlantic Wire.



Jump to comments
Presented by

The Atlantic Wire is your authoritative guide to the news and ideas that matter most right now.

Get Today's Top Stories in Your Inbox (preview)

What's the Number One Thing We Could Do to Improve City Life?

A group of journalists, professors, and non-profit leaders predict the future of livable, walkable cities


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Adventures in Legal Weed

Colorado is now well into its first year as the first state to legalize recreational marijuana. How's it going? James Hamblin visits Aspen.

Video

What Makes a Story Great?

The storytellers behind House of CardsandThis American Life reflect on the creative process.

Video

Tracing Sriracha's Origin to Thailand

Ever wonder how the wildly popular hot sauce got its name? It all started in Si Racha.

Video

Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.

Video

Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.

Video

The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air

Writers

Up
Down

More in Business

Just In