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Showing Greece the door could destroy the Greek economy. It could also cost Europe hundreds of billions of euros.

Data compiled by Barclays Bank show that the euro zone's collective exposure to Greece is €341-billion ($480-billion). There is no telling how much of that amount would be lost were Greece to default on its obligations – it missed a €1.6-billion payment to the International Monetary Fund on June 30 – and drop the euro.

But the losses would be substantial and would no doubt deliver a shock to Europe's public finances and to the currency and stock markets. In a blog published Tuesday, David Stockman, a business consultant who was director of the U.S. Office of Management and Budget during Ronald Reagan's presidency, said the 18 euro zone countries "have simply strapped themselves to a financial time bomb."

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The prospect of a Greek exodus – dubbed Grexit – is rising by the minute, with European officials now openly talking about Greece's departure. "We have a Grexit scenario prepared in detail," European Commission president Jean-Claude Juncker said on Tuesday, when Greece was given a firm, five-day deadline to reach a new bailout deal with its creditors or face bankruptcy. "We have a scenario as far as humanitarian aid is concerned."

On Wednesday, the Greek government showed signs of caving in to its creditors' demands in spite of the No vote in Sunday's national referendum, in which 61 per cent of Greek voters rejected the creditors' loans-for-austerity offer. Its economy under enormous pressure as its banks remained closed, Greece formally asked for a three-year bailout from the European Stability Mechanism (ESM), the euro zone's emergency rescue fund. In exchange, it promised to launch a tax and pension overhaul as early as next week.

Addressing the European Parliament in Strasbourg Wednesday morning, Greek Prime Minister Alexis Tsipras called for a "fair compromise" with Greece's creditors. "My country has been transformed into an austerity laboratory," he said. "This experiment has not been a success. We demand an agreement with our neighbours, one that gives us a sign we are exiting from the crisis, which will demonstrate light at the end of the tunnel."

The plea may not work. European officials remain highly skeptical that Greece, having rejected every one of the creditors' proposals in five months of virtually non-stop negotiations, can reverse course and present a credible proposal on Thursday, as the new Finance Minister, Euclid Tsakalotos, promised. Economists still put the chances of Grexit at 60 per cent or higher. "For the first time, Plan B [Grexit] appeared to turn into Plan A," Royal Bank's investment arm said in a Wednesday note.

Euro zone leaders and finance ministers have been quick to highlight the damage that Grexit would inflict on Greece. They are far less prone to draw attention to the damage that it would inflict on Europe.

The official euro zone exposure to Greece, as of July, was composed of bilateral loans (€52.9-billion); bailout loans from the European Financial Stability Facility, the predecessor to the ESM (€141.9-billion); payments owed to the European Central Bank (€27.7-billion, of which €3.5-billion is due on July 20); and "Eurosystem" liabilities, largely the Bank of Greece's negative balance with the interbank transfer system (€120-billion).

The total – €341-billion – is worth 3.4 per cent of the gross domestic product of the 18 euro zone countries (excluding Greece). While some countries might be able to afford the defaults on much of their exposure to Greece, others might not.

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Take Italy, whose exposure to Greece is €63-billion, or 3.9 per cent of GDP. Italy has been recession almost without stop since the 2008 financial crisis and its debt-to-GDP, at 130 per cent and rising, is second only to Greece's. A Greek exit and economic meltdown would probably trigger financial chaos in Italy. That may explain why Italian Prime Minister Matteo Renzi is one of the few European leaders who is saying he is optimistic that a deal breakthrough is imminent.

France's exposure to Greece is €72-billion and Germany's is €95-billion.

These figures exclude the European banks' exposure to Greece. While the amount is thought to be only a few billion euros, down from a peak of €128-billion, German banks' exposure has been climbing and reached about €10-billion a year ago, the latest figure available, according to a January report by the German think tank Bruegel.

What is not known is Grexit's potential damage to the European and global markets. While there is no doubt that the euro zone's ability to absorb a Grexit shock is greater than it was at the height of the crisis in 2012, there is no precedent, meaning economists and strategists can only guess what the effect might be.

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