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The Greek Debt Crisis: Implications for the Global Economy
As the Greek debt crisis has continued into its seventh year, Eurozone leaders are confronted with a choice: bailout Greece’s banking system in order to allow the emerging economy to stay in the common currency union or sever ties and force an exit. No matter which decision is chosen, both will likely affect the global economy. Before we explore the potential impacts these decisions may have, it is important to provide context to the role Greece plays today. According to the World Bank, the Greek economy represents 0.31% of global GDP. To put this into perspective, Apple’s roughly $700 billion market cap is approximately three times greater than Greece’s total GDP of $242 billion. However, it is not the size of the Greek economy that is the cause for concern. Rather, it is the precedent that will be set on how to deal with faltering economies within the Eurozone that will make the difference.