the greeks will have to comply with ECB requirements for budget balancing to stay in the eurozone. they have already shown they have no appetite at all for sorting out their budget, so odds are they will be out. how is anyones guess - theres no mechanism for leaving ...
after leaving the euro and defaulting on all their debts, they will try to borrow from the markets to support their almost-no-income but massive expenditure budget and find out that no one will lend to them, at any rate. bankrupt state, no police, no courts, etc etc. the remains of greece will be picked over by investors worldwide who will eventually own every piece of it thats worth having. argentina got away with it but they have a fantastic natural resources, not just nice beaches.
my feeling is that if they were to do a complete u-turn, tighten their belts even further and do what the eurozone tells them they will have a very painful 5-10yrs, but with a future. on the current path they will be the poorest country in europe for a generation or two.
losing greece would free up resources to support other vulnerable eurozone economies - portugal, spain and italy, but they will face the same choice - tighten your belts, take the pain and tough it out for a few years or face almost unthinkable consequences.
from a distance as an economist this is fascinating, as a brit its slightly worrying and as a businessman its already costly. french company groupama were derated from AAA fairly recently which meant we had to switch to a different partner, cost me personally almost a months work to sort it out although theres no obvious ongoing costs (apart from reducing the competition in the market somewhat.)
