Heading into the middle of 2015, Europe is at an impasse, with Greece saddled with debts it cannot pay and its creditors unwilling to hand over more cash without reforms.
It is now clear that there are no more bailouts for Greece so what is going to happen to world markets after Greece defaults?
Greece's economy has been in a shambles for six years. Unemployment tops 25 percent, and the rate of joblessness among the young hovers around 50 percent. Greece owes €9.7bn to the IMF this year alone!
Economists are pessimistic that the Greek financial drama will end happily even though Alexis Tsipras had recently offered concessions on key issues such as taxation and increasing the retirement age. Many expect Greek banks to implement capital controls to prevent a mass exodus of funds. Deposits have already slumped around 20 percent since the start of the year, and the banking system would probably collapse without further assistance of the ECB.
It should be expected that the ECB will probably do whatever it can to help the other 27 countries after Greece fails, however, how long will it take for Greece to reintroduce it’s own currency?
Taking the point one step further down the path, if Greece does leave or is kicked out of the single currency, it will most probably suffer inflation, layoffs, capital flight, shortages of essential commodities, and civil unrest. Of course it still will not have the money to pay for it's public services which includes the Police and Armed Forces, now we are looking at a scenario that could make some of the previous meetings in Brussels pale into insignificance.