The implications of a Greek default for the euro. CEPS Commentaries, 10 May 2010

In his latest Commentary, Daniel Gros raises the fundamental question of what would happen if the proposed €45 billion aid package can't bring the Greek tragedy to a happy ending. While acknowledging that the Greek economy would collapse, he finds that the impact on the rest of the single currency zone should be minor and that the institutions of the euro area would probably be strengthened as a result of increase intolerance towards deficit violations and reduced inaccurate reporting