Europe Braces for Greek Vote — and Maybe More

New York Times
June 14, 2012

Greek elections on Sunday could bring urgency to a debate that has been largely academic: whether the euro zone can withstand the departure of one of its members.

With a good chance that the elections will produce either a political stalemate or a populist left-wing government in Athens, even people who say they do not believe Greece will drop out of the common currency are preparing for that possibility.

Because there has been time to prepare, some economists say, Greece’s departure from the euro will not be as much of a shock as the collapse of Lehman Brothers in 2008, which provoked a global financial crisis. Nor is it likely to be as abrupt. Even if a new Greek government eventually decided it could no longer stay in the euro union, no one expects an immediate, hasty exit.

Lehman was a surprise. But Typhoon Greece has been swirling offshore for months if not years, giving investors, governments and euro zone citizens plenty of time to batten their financial hatches.

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