A. If Greece fails to reach a deal – or the Greek government rejects a deal – and the country defaults on its debt to the IMF, markets are fearing all economic hell to break loose for the country.
The ECB would likely stop its emergency funding for Greek banks and the country's central bank would have to impose capital controls to avert a bank run. Apart from the financial instability of a deal not being found, Athens could face a stark choice on whether to stay in the euro zone, according to Deutsche Bank.
Deutsche Bank economists Mark Wall and Marco Stringa and strategist George Saravelos warned in a note last week that if there is no agreement and there is a non-payment event to the IMF, a referendum on the creditor proposal and euro zone membership is possible – potentially causing more uncertainty.
"If the government rejects an agreement, the suspension of ECB financing would be likely," the analysts wrote.
"A referendum would likely take two weeks to organize. Alternatively, there may be renewed attempts at negotiation or an early general election. We would consider the latter very unlikely, as an election would take around a month to organize causing prolonged uncertainty and economic damage."
"Government cash buffers are running low, and it remains unclear if sufficient resources are available to pay wages and pensions over the course of next month," the bank said.