The likelihood of left-wing Syriza coming first in the snap Greek elections due on January 25 has again raised the prospect of “Grexit” – Greece’s exit from the eurozone.
If Greece falls out of the eurozone it is likely to see a massive devaluation that would increase the size of what would become foreign-currency, euro-denominated debt.
When Argentina broke from its hard peg to the US dollar, its currency dropped 75%. This means that Greece’s euro-denominated debt could treble in size.
For Cyprus in particular, there are two key reasons why the economy is less vulnerable today. Read more
