The dire warnings are from the chief economist of Toscafund, Savvas Savouri, who claims that introducing a new currency instantaneously in the wake of a euro exit would be impossible. The delay would lead to "a run on banks and evacuation of capital that would make what has already been seen as nothing by comparison".
"The word catastrophic would not do it justice enough", says Savouri, who comes from a Greek Cypriot background. "Those who imagine some post-euro-exit stability would be restored ... quite simply fail to understand the magnitude - social, economic and political - of such an eventuality", he says.
He predicted a range of problems for the country, from hyperinflation, extreme difficulty for the government in raising money on bond markets and an evacuation of people able to leave the country, taking as much wealth as they can with them.
"Inflation in Greece would quite frankly spiral in a way resembling Zimbabwe's experience," says Savouri, who also predicts severe poverty amongst the elderly – not that that requires any great prescience. The elderly are already being badly hit.
On the other hand, there is a substantial school of thought which argues that only by leaving the euro and devaluing the currency can Greece ever hope to get its finances back into balance. The problem there, of course, is that much of the residual debt will be denominated in euros, which means that debt will spiral, leading to an inevitable default, possibly precipitating Savouri's scenario.
Either way, it looks as if the various theories are close to being tested, as Greece once again is teetering on the edge of a catastrophic bankruptcy. This is all about the potential failure of a complex "bond swap" deal which is a key part of completing the second £109 billion bailout. According to the Press Association, the deal involves an unprecedented 50 percent nominal reduction on Greek sovereign bonds, costingt private investors up to €100 billion.
It has "not produced a constructive consolidated response by all parties, consistent with a voluntary exchange of Greek sovereign debt", says the Institute of International Finance (IIF), which is representing the bondholders. As a result, the representatives say they have "paused for reflection", with talks not resuming until next week. As it stands, the negotiations are "very, very tense".
Thus, not two weeks into the New Year and we are on the edge of another financial precipice, awaiting with bated breath the outcome of events which could crash the global economy.
Actually, there is an element of boredom about it all. Tense or not, we can only sit, perched on the edges of our seat for so long, before the shock element wears off. Sooner or later, though, we tip over the precipice. Then we can start being shocked all over again.
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