Nightmare of disorderly default focuses minds on Greece

Page last updated at 11:54 GMT, Friday, January 27, 2012 - 16:54 EST

Globe and Mail:

An illustration of a euro coin is displayed on a bank's advertising billboard as a man stands outside the branch in Athens..

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Argentina’s chaotic bankruptcy a decade ago triggered riots, looting and dozens of deaths. The prospect of that horror scenario playing out in Greece is focusing minds across Europe as the threat of default remains all too real.

At best, if private creditors walk away from a voluntary debt restructuring, a disorderly default would shut Greek banks for days to give Athens time to prevent a bank run by reassuring depositors that the lenders will not go bust.

At worst, if EU partners also pull the plug, Greece risks a chaotic descent into an extended bank freeze, possible shortages of basic goods, violence and what central bank governor George Provopoulos called the “hell” of a euro exit.

“If banks were hit, I could not import goods any more. I would have nothing to sell. How would I survive?” 66-year-old shop manager Antonis Broukias asked in his old-fashioned books and stationery store in central Athens.

Read the whole story: Globe and Mail