IN THE NEXT 48 HOURS, WE WILL FIND OUT IF THE EURO-ZONE WILL COLLAPSE

The eurozone faces a disastrous, €1 trillion (£833 billion) blow if Greece is allowed to slide into a chaotic default, international bankers warned today. 

The leaked, doomsday scenario emerged from the Institute of International Finance — the body representing the banks and hedge fund holders of Greek debt leading negotiations with Athens over the financial rescue. 

It comes two days ahead of a crucial deadline for investors holding €206 billion in Greek bonds to sign up to a swap cutting the value of their debt by around 75% to ease the beleaguered nation’s debt pile.  

The memo warned of “very important and damaging ramifications” from a Greek default, including further bailouts for Portugal and Spain as well as €350 billion pumped into Spain and Italy to prevent an even more catastrophic collapse. The European Central Bank — facing €177 billion in losses on Greece — may also need to be recapitalised, it added. 

The raising of the stakes by the IIF further fuelled the jitters in stock markets this week, after China pared back growth targets on Monday.

THE GREEK GOVERNMENT NEEDS TO GET 75% OF THE BONDHOLDERS TO AGREE TO ABSORB LOSSES OR THE ENTIRE DEAL FALLS THROUGH.

IF THE DEAL FALLS THROUGH THEN THE DOMINOES START TO FALL.

STAY TUNED...

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