US News & World Report
May 18, 2012
Two years ago, European leaders were willing to do almost anything to prevent a financial meltdown in Greece. If Greece defaulted on its debt or left the euro zone, it could have triggered a chain reaction across Europe, and global financial panic.
The country may be in even worse shape today, with some analysts saying that a chaotic exit from the euro zone is inevitable—perhaps as early as this summer. But many changes over the last two years have made the rest of the world less vulnerable to an implosion in Greece. "My gut feeling is that if Greece exits, it will be less calamitous than it would have been two years ago," says Jan Randolph, director of sovereign risk for forecasting firm IHS Global Insight. "Leaders in Europe have managed to put Greece in a cushioned room, so they'll be able to contain the situation much better than before."
If Greek voters and politicians choose to reject the conditions that have come with a serious of bailouts and global lenders suspend their payments, Athens could run out of money as early as June, according to a recent analysis by Bank of America Merrill Lynch.
The fallout from that could send the Greek economy into an even sharper tailspin, with growth shrinking by another 10 percent per year.
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