Greece’s economic woes: What’s the endgame?

After two bailouts, months of strict austerity measures, and a seemingly endless string of euro-zone finance minister summits, it’s still not quite clear what lies ahead for Greece. Might the nation be forced to leave the euro zone? And if so, how soon? Here’s a roundup of predictions from economists and analysts.

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There's been a groundswell of discussion in recent weeks that Greece could leave the euro zone. Such a move would allow the country to devalue its own currency in an effort to get its economy back on track by makings its exports more attractive. Economist Paul Krugman wrote on his New York Times blog that it seems likely that we'll see such a move happen in June. Greece's former currency, the drachma, is seen in this photograph.

Kostas Tsironis / Bloomberg News

While Krugman and others see withdrawal from the euro as an increasingly likely option for Greece, not all analysts are so sure. In a blog post for the Peterson Institute, Jacob Funk Kirkegaard wrote: “Prospects for an outright Greek Exit — a Grexit — are no more than 5 percent.” Many European leaders have voiced commitment to keeping the troubled nation in the euro zone in order to preserve stability in the regional and global economies. Here, European Union and Greek flags fly near the Parthenon temple on Acropolis hill in Athens.

/ Bloomberg

Marcus Walker of the Wall Street Journal describes how a win on June 17 by the leftist Syriza party could create yet a different course for Greece: “Syriza's popular leader Alexis Tsipras tells Greeks the country can keep the euro even if it repudiates the bailout. His message appeals to Greeks who want to keep the currency but who resent Europe's threats. Syriza's belief in a third way between austerity and expulsion is being encouraged by Europe's shifting political mood. In France, Italy, the Netherlands, and to some extent even in Germany, voters and politicians are increasingly critical of the effects of austerity in a downturn.” Here, Tsipras delivers a speech in Athens.

John Kolesidis / Reuters

Nonprofit researchers at the Conference Board of Canada say there's an outside possibility the euro zone could break up in a different fashion, leaving Greece to band together with other weaker nations while the continent's powerhouse economies share their own currency. However, the report says this outcome is “unlikely to find political support” and has “less than five percent” chance of happening. Pictured here is the Reichstag, the parliament building in Germany, which is widely considered to have Europe's strongest economy.

Michele Tantussi / Bloomberg News

Some analysts have wondered how a possible exit from the euro zone would affect Greece's membership to the larger 27-nation European Union. As Luke Baker of Reuters points out, that's a complex question to answer: “It's not even clear Greece can leave the common currency. The EU's Lisbon Treaty does not make any such provision — it only considers a country leaving the European Union.”

Mark Renders / Getty Images

If Greece does leave the euro zone, Paul Ames of CNN warns of a dire domino affect: “In the corridors of the European Union’s headquarters, the fear now is not only that Greece could be forced out, but that the resultant chaos would spread quickly to Portugal, Ireland, Spain and beyond, causing a collapse of the euro currency and a generalized economic meltdown.”

Akos Stiller / Bloomberg News

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