ed Bracing for the worst

Following Greek voters’ rejection of an austerity-based bailout, creditors seem to be measuring their strength against Greece. The European Central Bank, which had been keeping Greek lenders afloat, said it would maintain a key financial lifeline to Greek banks, but raised the bar for them to access emergency funds.

After crisis talks in Paris with German Chancellor Angela Merkel Monday, French President Francois Hollande said: ``The door is open to discussions. It is now up to the government of Alexis Tsipras to make serious, credible proposals.’’

The leftist Greek premier reportedly wants creditors to begin talking about restructuring Greece’s huge debt and extending its maturity. Depending on the result of fresh bailout talks, Greece’s ultimate exit from the eurozone could become a reality. The country defaulted on a 1.5 billion euro repayment to the IMF last week.

More worrisome is that the Greek crisis may spread to other European countries. As it stands, there is no denying the possibility that some financially weak countries in Southern Europe such as Portugal and Italy might be infected by the contagion.

Now there are two glaringly different views about Greece’s debt debacle.

One is to lash out at Greeks’ irresponsible and unyielding attitudes after managing fiscal policies loosely in the wake of the euro’s launch in 1999. The other is to censure creditors, which have imposed stringent bailout measures on Greece although the cash-strapped country cut pensions and conducted other reforms. Both views make sense, but the common perception is that the turmoil is the result of applying a single currency and a single exchange rate to different countries that have different economic conditions.

Greece is not a big economy, but its exit from the eurozone could deal a fatal blow to the global economy. First and foremost, confidence in the euro may hit rock bottom, which would send the European economy into a tailspin. The United States, which urged Greece and EU leaders to find a compromise Monday, could shelve its plan to raise the key rate because of the latest Greek crisis.

It’s generally accepted that Greece’s impact on the Korean economy would be limited. But our financial authorities need to brace for the worst, considering that past economic crises were far more painful than we thought.

Korea’s financial markets could be shaken profoundly if big lenders from Germany, France and other European powers withdraw funds all of a sudden. In fact, Seoul’s main bourse fell for a second day in a row Tuesday following Monday’s 2.4 percent decline amid foreign investors’ net-selling.

In Tuesday’s Cabinet meeting, President Park Geun-hye called for preemptive measures to minimize the fallout from the Greek situation. Our bureaucrats should learn lessons from their poor response to the recent MERS outbreak.