The reality isn’t so grim. If Greece defaults on its debt some country’s and banks (mostly IMF) will loose money, and probably a fair bit of it. Defaulting on debt isn’t a new revelation though it has happened to the majority of countries regardless of size or stature and will likely happen to them again. As Reinhart puts it in his book, This Time is Different: Eight Centuries of Financial Folly:
"Greece’s default on debt reached an almost pandemic reoccurrence at the turn of the century… Greece has been in default roughly one out of every two years since it first gained independence in the nineteenth century."
On a local level a default of government debt is disastrous, on a national level painful; on an international level it is nothing more than an inconvenience. Have no doubts about it, if Greece defaults it will likely effect the overall confidence of investors in the west. But a default in Greece should not have any direct and sustained impact to those economies not directly tied to the rise and fall of Greece’s national debt and bond structure.
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