S&P says Greek GDP would shrink by 20 pct under Grexit scenario
Standard & Poor's estimates that Greece's Gross Domestic Product would shrink by 20 pct in the a four-year period if Greece was to leave the Eurozone, the Financial Times said on Thursday.
The credit rating agency said that without the support of the Eurosystem -which is estimated at 70 pct of Greek GDP- Greek banks and the payment system could not operate and would remain shut. A new Greek currency would be undervalued against the euro and would lead to a explosion of the value of the public and private debt. S&P said that the rest of the Eurozone would be relatively protected, although a possible Grexit could hit capital markets and push state bond yields higher, particularly in fiscally more vulnerable countries in regional Europe.
