If Greece has to leave the eurozone the cost will be massive.
The European Central Bank and the single currency bloc’s governments and banks would be hit with a bill of hundreds of billions of euros.
It is estimated that the ECB, the International Monetary Fund and eurozone nations hold close to 200 billion euros worth of its debt.
A Greek exit from the euro would mean Athens defaulting on those loans which is why the IMF is ready for the worst.
IMF chief Christine Lagarde explained: “We at the IMF have to be technically prepared for anything, because it is our job. But I’m not suggesting that this is a desirable solution. I’m just saying this is within the range of multiple options, one that we have to technically look at, obviously.”
Economists say Athens’ default following a Greek euro exit would wipe out the European Central Bank’s capital reserves.
ECB President Mario Draghi has just acknowledged for the first time that Greece could leave the currency union though the Bank’s “strong preference” is for it to stay.
Making things more difficult, Greece is without an elected government until next months re-run elections.
That means it is politically and economically frozen, with no one to take essential decision on cuts and reforms that are part of its latest bailout.