The Organization for Economic Co-operation and Development (OECD) has warned that a default by Greece or its exit from the euro area risks derailing the whole euro zone's recovery.
"Failure to reach a satisfactory agreement between Greece and its official creditors would intensify perceptions of re-denomination risk and uncertainty," the OECD said in its "Economic Outlook" report.
The comments come as talks between Greece and its international creditors appeared to be reaching some kind of decisive point, on reports that the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission was to present Greece with some kind of deal that could end months of inconclusive reform talks.
A Greek government official told CNBC Wednesday that the government had not even seen the proposals but said the Greek Prime Minister Alexis Tsipras was travelling to Brussels for evening talks with Commission President Jean-Claude Juncker.
Greece faces a 300 million euro ($327.9 million) payment to the IMF on Friday – and more in the coming weeks and months -- but there are doubts that the country can honor its debt obligations without further financial aid, putting more pressure on Greece to reach a deal.
The OCED said that although the implications of such an "extraordinary event" would be impossible to predict, "they would most likely involve an aggravation again of financial fragmentation of the euro area, dampening real activity and restarting negative feedback loops between the real economy, the banking sector and public finances in vulnerable countries."
While the OECD believed the euro zone would suffer from a Greek default, others believed the impact could be "bearable," including Tim Edwards, senior director of Index Investment Strategy at S&P Dow Jones Indices.
Edwards said in a note Wednesday that if Greece did default, it was likely to be "bearable because the IMF and ECB now own pretty much every bond on which the Greek government can default. There are other holders, but not many of them. By now, each knows the risks," Edwards noted.
"If Greek equities, Greek bonds and Greek GDP (gross domestic product) disappeared, it would certainly be a tragedy, but not of epic and globally destructive proportions. And it is more likely that Greece will default precisely because it is now bearable," Edwards said.
While a default could possibly be on the cards, there is little appetite in Europe for more upset, given that the region is only just starting to recover from the financial crisis.
Prime Minister of the Netherlands, Mark Rutte, told CNBC Wednesday that it was "hard to say" whether a deal between Greece and its creditors could be reached, given that negotiations have been ongoing since February without reaching a resolution.
"The last four months have been very difficult. I know that many people are now working very hard to come to a solution."
Rutte remarked that nobody wanted Greece to leave the euro zone, a so-called "Grexit."
"Nobody wants it (a Grexit)…What we're all aiming for is a solution where Greece (the Greek government) accepts that they have to do what the previous (government) promised. At the same time, we want to keep them in," he said.
- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld