The exit of Greece from the euro zone, followed by the exit from the monetary union of other countries in southern and western Europe, would have an impact of €17,000 billion on the global economy with a global recession that would hit countries in other parts of the world, including the United States and China, according to a German research center quoted by the CNBC.
The study, conducted by Prognos at the request of Bertelsmann center, examines four scenarios of Greece default on sovereign debt payments.
In the most pessimistic alternative, funds to support countries with problems were simply exhausted. This would cause the exit from euro zone of Greece, Spain, Italy and Portugal, which would create a global recession and a cost by 2020 of €17,200 amounting to the combined GDP of 42 economies of the most developed countries.
“In numbers, the impact would be the most powerful for France – €2,900 billion, United States – €2,800 billion, China – €1,900 billion and Germany – €1,700 billion,” the study said.
Many analysts speculate when and not whether Greece will leave the euro, but German Chancellor Angela Merkel, ECB president, Mario Draghi, and the head of the Eurogroup, Jean-Claude Juncker, repeatedly voiced their strong support for the Greek state in recent months.
“Besides the severe economic consequences, such a recession would put a strong pressure on social and political structures of several states. Especially on those who leave the monetary union, but also in others as well,” says the study.
Sovereign debt crisis began in Greece, after a massive review of the budget deficit caused investor fears about the sustainability of government debt. The crisis spread to Portugal, Ireland and Spain, with severe economic impact in the euro area, the European Union and globally.
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