The press is buzzing with talk of Greece leaving the euro. And if Greece leaves, what next? The press is also buzzing with talk of a possible, if not probable, breakup of the euro altogether – a Eurodämmerung as Paul Krugman calls it.

So is Greece likely to leave the euro, or will the Greek electorate vote next time for the parties supporting the austerity package they negotiated with the EU?

If Greece does leave the euro, what would be the implications for the Greek economy? And what would be the implications for the rest of the eurozone? Would it fall apart: would there a be a domino effect to Spain, Portugal, Italy and Ireland and then the whole eurozone? Or would Germany and the ECB do whatever was necessary to prevent any more countries leaving?

The following articles ponder these weighty questions. In the meantime, stock markets around the world have plunged on fears of the damage a disorderly Greek exit could do to the eurozone and to the global economy.

Greece, euro exit and the drummer in the band Reuters, Luke Baker (14/5/12)
Greek fire could singe rest of euro Financial Times, Richard Milne and Patrick Jenkins (14/5/12)
Eurozone: If Greece goes … Financial Times, Chris Giles, Peter Spiegel and Kerin Hope (13/5/12)
How would Greece leave the euro? BBC News, Kabir Chibber (10/5/12)
CBI: Greece eurozone exit ‘would be like an earthquake happening’ The Telegraph, John Cridland (14/5/12)
Forget what you’re hearing: Greece won’t quit euro soon Globe and Mail (Canada), Brian Milner (14/5/12)
Could the euro survive a Greek exit? BBC News, Robert Peston (14/5/12)
Greekonomics (see also) BBC News, Paul Mason (9/5/12)
This is how the euro ends – not with a whimper but a bang The Telegraph, Jeremy Warner (15/5/12)
EC and ECB working on emergency plans for Greek euro exit, says trade commissioner Karel De Gucht The Telegraph (18/5/12)
Fiddling while Athens burns The Economist (19/5/12)
Exodus, chapter 1 The Economist (19/5/12)
The Greek run The Economist (19/5/12)
Greece will leave the euro. But what then? Independent on Sunday, Hamish McRae (20/5/12)
No quick fix for Euro – maybe a slow one? BBC News, Stephanie Flanders (24/5/12)


  1. If Greece left the euro, what would happen to bank deposits in Greek banks?
  2. What would be the costs and benefits to the Greek economy of a reintroduction of the drachma?
  3. Why might individuals and companies, if they were able, move their euro deposits out of Spain, Portugal, Ireland and Italy into accounts based in other eurozone countries? What would be the implications of such financial flows?
  4. What can the ECB do to support the banking systems in vulnerable eurozone countries? Is there any theoretical limit to the amount that the ECB can offer?
  5. What is the role of the central banks of individual eurozone countries in a transfer of large-scale funds from one eurozone country to another? How does this impact on the receiving country (e.g. Germany)?