YEREVAN, October 18. /ARKA/. Greece's exit from the Euro bears the risk of kindling a wildfire throughout Europe - possibly even on an international level - and may result in a worldwide economic crisis. Countries affected would include not only Southern member states and their EU partners, but also the USA, China and other emerging countries, German Bertelsmann Stiftung reports.

This is the conclusion of an economic forecast study carried out by Prognos AG on behalf of the German Bertelsmann Stiftung.

For Greece, the exit scenario would imply national insolvency, a massive devaluation of the new Greek currency, unemployment, sharply declining domestic demand and many other problems. All these domestic effects would have a direct impact on its trading partners. In Greece alone, the ensuing losses of growth would amount to 164 billion euros or 14,300 euros per capita by the year 2020. The 42 top national economies in the world would have to absorb total losses amounting to 674 billion euros in total.

The scenario would become much more threatening if an exit of Spain is taken into the equation. If Spain would join the group of countries leaving the Eurozone, declines in growth in Germany would increase to 850 billion euros by 2020, with outstanding debts of 266 billion euros being waived. In the USA, it would mean a loss of growth to the extent of 1.2 trillion euros and in the 42 countries under review it would result in losses of 7.9 trillion euros. The accumulated per capita losses would also soar up in this scenario. The result would be a loss of 10,500 euros per capita over eight years by 2020 for Germany, a loss of 3,700 euros in the USA and as much as 18,200 euros in France and 16,000 euros in Spain respectively.

In the worst case, the situation would totally run out of control if the Euro crisis were to reach the point where Italy would have to secede from the Eurozone, too: Germany would be giving up 1.7 trillion euros and would have to write off 455 billion euros. In this scenario economic losses in Germany with more than 21,000 euros per capita would be even higher than in the exiting countries: Greece would lose 15,000 euros per capita, Portugal and Italy nearly 17,000 euros and Spain 20,500 euros. Another effect would be a dramatic increase of unemployment: only in Germany the number of unemployed rise for more than a million by the year 2015.

This scenario would eventually lead to severe international recession and global economic crisis. By 2020, growth losses in the countries under review would reach a total of 17.2 trillion euros. In absolute terms, France would suffer from the highest losses at this point (2.9 trillion euros), followed by the USA (2.8 trillion euros), China (1.9 trillion euros) and Germany (1.7 trillion euros).

The study analyses the financial consequences of different exit scenarios covering a “Grexit” as well as a secession of different groups of crisis-stricken countries from the Euro.—0--