This has never happened in the history before - no one has ever left the European Union yet. And Greece and its European partners hardly want this outcome. However, as far as the possibility exists, lets see what impact it will make on the economies of Greece, the EU as a whole, as well as businesses.
If Greece leaves, it will dampen the idea that the euro project is
irreversible and could give a boost to anti-euro and anti-European Union
political forces in other countries, like the ones in Spain and Portugal, where fatigue with austerity is growing.
Grexit
Antonis Samaras, the previous prime minister of Greeece, warned that living standards could fall by 80% within a few weeks of exit.
The Greek authorities would simply run out of euros, as it would be unable to borrow from anyone - not even other European governments. The government would have to pay social benefits and civil servants' wages in IOUs (if it pays them at all) until a new non-euro currency can be introduced.
Repaying debts would neither be possible, which now amount to a total of about €320bn, most of it owed to European governments and agencies and the International Monetary Fund. They would have to impose a freeze on withdrawals and on people taking money out of the country. This could lead to queues of ordinary Greeks trying to empty their bank accounts before they get converted into a new currency worth substantially less than the previous one.
In the long-term, having a much more competitive exchange rate would be a big advantage for Greece. But the devaluation would not solve underlying problems in the economy, including poor tax collection and a struggle to control government spending.
A surge in inflation is also a real possibility.
Tax receipts would probably fall as the economy contracted, so the government might finance spending by printing money. The likely currency depreciation would also be inflationary.
It would make imported goods - which in Greece includes a lot of its
food and medicine - more expensive.
Europe
There is a danger that a Greek departure from the euro might do wider economic damage, but the risk is generally thought to be much reduced since 2012, the last time such speculation was rife.
Actions by the European Central Bank are a key element behind this change.
First of all, there is the ECB's commitment to do "whatever it takes to preserve the euro". That promise, made by the ECB's President Mario Draghi in July 2012, was later fleshed out to include a commitment to buy the debts of governments whose borrowing costs were affected by fears of them leaving the euro.
Though the central bank has not acted on that promise, its existence was enough to calm eurozone financial markets. And the ECB could use this initiative if the fears were to re-emerge in the wake of a Greek exit.
In January ECB also announced quantitative easing - the programme of buying government debt across the eurozone.
It does not target financially vulnerable countries, but the expectation has already reduced government borrowing costs, which have stayed quite low for all eurozone countries (as implied by the bond market) except Greece.
Thus, if Greece really does go, financial contagion cannot be ruled out.
Nervous depositors in other struggling eurozone countries, such as Spain or Italy, may also move their money to the safety of a German bank account, driving a banking crisis in southern Europe. Confidence in other banks that have lent heavily to southern Europe - such as the French banks - could also be affected. The banking crisis could conceivably spread worldwide, just as it did in 2008.
Businesses
Grexit would be a disaster for Greece's businesses. Some contracts governed by Greek law would be converted into a new currency, while other foreign law contracts would remain in euros. Legal disputes over whether they should be converted or not could follow.
Greek firms who still owe big debts in euros to foreign lenders, but whose main sources of income are converted to a devalued non-euro currency, would be unable to repay their debts, which could lead to bankruptcy. Foreign lenders and business partners of Greek companies would be looking at big losses.
As of wider euro zone, businesses, afraid for the euro's future, may reduce investment, while ordinary people may cut back their own spending. All of this could push the eurozone into recession.
The euro could lose value in the currency markets, providing some relief for the eurozone by making its exports more competitive in international trade. But the flipside is that imports from the rest of the world would become more expensive - especially the US, UK and Japan.
