Greek crisis: what happens next?

by Jill Treanor

Guardian
May 17, 2012

How would Greece leave the eurozone?

Greeks go to the polls again on 17 June after the vote on 6 May proved inclusive. The new election is seen as a referendum on the euro. If the anti-austerity Syriza party wins control and cannot force Germany to relax its opposition to lower and slower cuts, there may be no option but for Greece to leave the eurozone – or be kicked out.

So it's down to democracy then?

Not quite. If outflows from the Greek banks continue at this current pace then the instability could force Greece out of the eurozone before the election.

What would happen if Greece left?

It would have to be carried out almost overnight – most likely over a weekend. The banks would have to shut their doors, bank accounts would be frozen and capital controls imposed to stop any more money leaving the country. The new currency would be likely to lose at least 50% of its value relative to the euro so any saver in Greece who has left their money in a bank will instantly find it is worth considerably less. Opinion polls show that while Greeks do not want austerity, most of them want to stay in the euro – which explains why savings are still sitting in Greek banks.

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