"The standoff between Greece and its creditors on how to proceed on its bailout program risks triggering a simultaneous cash and credit crunch, which could drive the country out of the euro area."
Here’s how a worst-case scenario could unfold:
The Greek government, companies and lenders have all effectively lost access to international markets, due to the uncertainty over the country’s future.
The current sources of liquidity are bailout funds from the euro-area nations, the currency bloc’s crisis fund, the International Monetary Fund and the European Central Bank’s Emergency Liquidity Assistance.
Failure to strike a compromise means that these payments would cease. This means that the state would be unable to service its debt obligations
Read more: “If the ECB considers the talks to have stalled, there is a risk that it will suspend ELA, perhaps leaving Greece with no choice but to exit the euro zone,”