But what would the impact be for the UK? Athens, at the centre of this storm, is 1500m away and we aren’t part of the Euro. How hard would our already very fragile (and somewhat stagnant) economy be hit? How much should we be worried?

1)      The effect on our banks

Although most Banks have been shrewdly slashing their direct exposure to Greece over the last 12 months, Britain’s huge banking industry with its heavy international exposure would find it impossible to escape collateral damage. The impact that a Greek exit would have on markets in Spain and Italy, both of which Britain is far more exposed to and reliant on, would be felt hard. Neither country has proved that they are capable of tackling their debt mountains and both would come under intense pressure following the first exit.

A Greek exit would hit lending hard. It would force up the rates which banks charge for finance. This would mean less easy lending and borrowing (affecting the small and medium size businesses that the Government is so keen to protect and promote). This would also hit the exports industry hard.

2)      The effect on our exports

A slight green shoot in the recent stagnation of our economy has been the rising exports to our Eurozone neighbours. As much as the government might be pushing the prominence of Asia and Latin America as the ‘new big thing’, Europe still accounts for 50% of all exports, with Italy and Spain being two of the biggest. However, over the past months exports in Italy and Spain have fallen by 7% and 8% respectively. This would likely continue to fall as the pressure on Spain and Italy increases and the crisis deepens. This is also compounded by the increased performance of Sterling against the Euro. Whilst a bonus for those British families  taking their holidays in the Eurozone countries this summer, a weak Euro means exports from the UK to Europe are likely to decrease.

Whilst we look on as concerned viewers as things spiral out of control on the other side of Europe, our government outlines plans to protect our economy from the fallout. Total protection, however, seems unlikely. We must put our faith in the Greek people to decide on a government on June 17^th. It would seem that in order for this to happen, the IMF and ECB would have to change the conditions on which the money which Greece needs to dig themselves out of this hole depends. This is, apparently, what Obama will be counselling Angela Merkel for this weekend. We will know the outcome and the fallout soon enough.

Whilst some City detractors will see this as cause for celebration, with the amount of taxation paid  on City bonuses the biggest loser here would actually appear to be the Treasury and therefore, public services.