Exposure ‘significant,’ but losses would be ‘far less’ BloombergGerman Chancellor Angela Merkel wants Greek Prime Minister Alexis Tsipras to pay up. Greece’s fate within the eurozone could very well be decided this weekend as European leaders meet to discuss a third bailout program for the debt-strapped and economically devastated country a week after Greek voters rejected creditor demands in a referendum. Greece insists that its debt load is unsustainable and that any package must include some forgiveness of its existing loans in return for further austerity measures (a stance that is been echoed by the International Monetary Fund). That is met stiff resistance from Germany, Europe’s largest economy, which has insisted there is little scope for trimming the debt load and that Greece must continue pressing ahead with fiscal reforms. Without an agreement, Greece, which is already in arrears to the International Monetary Fund, will soon fall into formal default. A 3.5 billion euro ($3.9 billion) payment to the European Central Bank on July 20 looms large. Without a deal, Greece is likely to be firmly on a path to eurozone exit. Whether Greece gets a debt write-down or it leaves the eurozone, the country’s creditors won’t get everything they’re currently owed. Deutsche Bank, in the table below, breaks down the exposure of each eurozone country (and its taxpayers) to Greece: Note that the liabilities via the Target2 payments system would be realized only in the case of a “Grexit and not in a default alone as long as there is an adequate recapitalization of the country’s banking system, noted Frankfurt-based Deutsche Bank strategists Abhishek Singhania and Jack Di Lizia. Generally speaking, there are three dimensions to creditors’ potential exposure: direct economic loss; the need to raise funds to cover these losses; and the impact on government debt. While the exposure is “significant,” the actual impact from the losses would be “far less,” they said, in a note. “First, a significant proportion of these exposure have already been accounted for in government debt statistics. Second, not all these exposure would require countries to raise additional funds. Lastly, even in the case where funds need to be raised it would be spread over many years,” the analysts wrote.MarketWatch