As Greece teeters on the edge of financial collapse, European officials have a new task before them: preventing the financial turmoil from spreading across the continent, across the Atlantic and around the rest of the world.
The fear is that Greece’s financial turmoil could spread beyond its borders despite European efforts to create a “financial firewall” to contain it.
“The spillover effects, the chain of consequences are very difficult to assess,” said International Monetary Fund President Christine Lagarde on Wednesday. “We can certainly assume that it would be quite messy.”
Lagarde, whose agency has been among those providing financial support for Greece, said the IMF has begun making “technical” preparations for Greece’s possible departure from Europe’s common currency, the euro.
Greece’s exit from the eurozone seems more likely every day. A two-year standoff deepened this week between Greek voters, 1 in 5 of whom are unemployed, and European officials, led by German Chancellor Angel Merkel, who are insisting on continued “austerity” by the Greek government in exchange for a financial lifeline.