My take of what could happen between Greece and its creditors.

          A lot of uncertainty surrounds developments between Greece and its creditors. The outcome is potentially ruinous for Greece while I take little comfort from the fact that the waves of pessimism and optimism coming for Greece have had so far limited impact on developments outside Greece, and in particular on the peripheral countries of the €-area. I agree with the observation that the ability of the €-area to withstand a Greek shock is better than, say, 2 years ago and I also see the possibility that Grexit could lead to enhanced cooperation between the remaining members of the €-area, to stress that Greece is a unique case and attenuate the consequences of Grexit. However this does not make me confident that the shock would be limited: attenuating a catastrophe is different from avoiding one.

          To visualize the different developments that could take place and their probability I have designed the following tree-chart. (If you need it, click on the figure to zoom on it.)


The Greek tree



The Greek tree legend