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The Very Big Risks Of The Greek Debt Crisis
Greece is spiraling ever deeper into a financial and political crisis that could end with it becoming the first country to crash out of the euro.
That's not going to spell the end of the European Union -- after all, Greece represents just 2% of the eurozone. Its economy is worth about $200 billion, making it slightly bigger than Alabama, but smaller than Oregon.
So why did President Obama pick up the phone Sunday to urge German Chancellor Angela Merkel to try to find a solution, even at this late hour?
Here are five reasons why Greece's fate matters:
1. Fear of the unknown: Will it be a "Lehman moment"?
Markets around the world took a beating Monday in response to weekend developments that have set Greece on the path to defaulting on its enormous government debt and ultimately abandoning the euro, the so-called 'Grexit' scenario.
That's not because investors are heavily exposed to Greek assets. In fact, most of Greece's debt is now held by other governments and international institutions that are strong enough to cope with a default. Some U.S. hedge funds are invested in Greek banks -- and have already taken hefty losses - but most global banks have relatively little at stake in Greece's financial system.
More: www.money.cnn.com
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