The title was the big hit by The Clash. Its not so much about Greece leaving the E.U., its about the countries that "can" follow after that. If Greece "can" leave, Portugal and Spain could follow. Greece in itself is a small problem to the rest of the world. However, the Greeks will HAVE TO take their medicine one way or another - by following the austerity measures set by E.U. or go it alone. The former will see tightening of belts but in a controlled manner. The latter will see massive hyper inflation and devaluation of the drachma. Just remember Argentina and Indonesia.
Once the rest actually sees how tough it is for Greece to go it alone, I don't think ANY other country would want to risk leaving E.U.
But what we all want to know is how it will affect the local markets. Have to go down in sympathy for at least a day. I don't see how, why, this can drag the rest down. If anything, funds will flow out of Europe to other stabler performing regions. This event does not qualify as a reason or catalyst for a sustained bearish sell down.
Europe's ruling elite is now openly talking about whether Greece might leave the euro, breaking a 2.5 year taboo.