Since Greece’s inconclusive May elections, panicked citizens have withdrawn 3 billion euros ($3.8 billion) from their bank accounts, and as much as 800 million euros on a single day.
Meanwhile, the European Central Bank (ECB) says it will no longer lend to certain Greek banks. As Greece approaches the precipice of a euro exit, many around the world are wondering what would happen if Greece actually takes the plunge.
One theory is that the losses will spread across the globe. “Many of Greece’s bad debts have already been socialized” by the ECB and the IMF during Greece’s bailout, says Timothy Garton Ash at Britain’s The Guardian. So if Greece defaults, Germany and other European nations that hold Greek bonds “would end up footing part of the bill.”
What happens if Greeks quit the euro?