Greece and its international creditors have less than five hours to reach a new bailout deal, and neither side seems prepared to make concessions. A default is in sight and the possibility of a Grexit is mounting. What would it cost the European Union (EU) if Greece leaves the eurozone?
FINANCIAL LOSSES
Among Greece's three creditors, namely the European Commission, the European Central Bank (ECB), and the International Monetary Fund, the partner countries from the eurozone owe more than 60 percent of Greek debt.
As a default could wipe out 100 percent of Athens' debts with other EU governments, a Grexit would lead to financial losses for the countries that lent Greece money.
Eurozone governments gave Greece 52.9 billion euros (58.0 billion U.S. dollars) in bilateral loans under the first bailout agreed in 2010. Since the second bailout was agreed upon in 2012, Athens has so far received 141.8 billion euros from eurozone partner countries. If a Grexit were to take place, a large part of this money would never be seen again.
Of the eurozone members, Germany's exposure to the two bailouts totals 57.23 billion euros, France's is 42.98 billion, Italy's is 37.76 billion and Spain's 25.1 billion. According to a German official, direct and indirect losses for Germany would be as high as 770 billion euros if Greece were to leave the currency union.
According to the Bruegal Institute in Brussels, the cost of a Grexit would cripple the eurozone and delay recovery for the next years.
However, Fraser Cameron, director of the EU-Asia Centre, said if Greece were to exit, it would not be a disaster for Europe.
"Greece comprises less than 2 percent of the EU economy and the ECB has built firewalls to ensure there would be no contagion," he said. Meanwhile, he admitted that an exit could set a dangerous precedent for other member states.
INTEGRATION REVERSE
"Though the economic cost of a Grexit is manageable, it would be more a political blow to the concept of solidarity," the expert said to Xinhua.
The Greek government decided on Saturday to hold a referendum on July 5 asking Greek voters to vote on a new bailout draft agreement with international creditors.
Jean-Claude Juncker, president of the European Commission, declared the Greek bailout referendum to be an in-out referendum on the EU membership.
A "no" vote this Sunday, would, he implied, not just force Greece out of the eurozone, it would lead inexorably to Greece falling out of the European single market and the EU.
That means if a Grexit were to take place, it would mark the first reversal of the process of European solidarity and integration which began more than 60 years ago.
The Grexit drama would certainly add to Eurosceptics' rhetoric. In recent years, there has been a rise of parties across the European continent that object to rules imposed by Brussels: the anti-EU United Kingdom Independence Party (UKIP), the far-right National Front in France, Podemos (We Can) in Spain, and the 5-Star Movement in Italy, to name a few.
Media have been reporting these parties' approval of Greece's rejection to the creditor's proposal and referendum movement.
"I hope we will soon be seeing the first historic setback for the European Union," vice president of National Front in France Florian Philippot said, referring to the Grexit.
SECURITY THREATS
The EU is facing a growing pressure of immigration flows and mounting risks from terrorism. The consequences of a Grexit will have far-reaching strategic and security implications to the EU, experts warned.
Greece lies on the Mediterranean and has one of the longest coastlines in Europe, making it an attractive option for illegal immigrants hoping to enter Europe.
According to official data from the National Coordination Center for Border Control, Immigration and Asylum, 13,400 illegal immigrants entered Greece in the first three months of this year, triple the number of the same time last year.
The Greek government estimated there would be 100,000 illegal immigrants seeking entry into Europe by way of Greece in 2015.
If Greece leaves the EU, it is highly unlikely that it will try to prevent the illegal immigrants from travelling on to the rest of Europe. In fact, Greek Defense Minister Panos Kammenos warned that Greece would suspend European treaties, allowing immigrants to move to the rest of the continent.
Greece is also a member of NATO. According to NATO's statement, Greece's defense expenditures in 2015 will be the second highest (as a proportion of GDP) in the military bloc.
A Greek exit from the EU will lead to a power vacuum in the southeastern corner of Europe. The United States is concerned that a Grexit could encourage the Mediterranean country to strengthen relations with non-EU states.
