But the jittery mood was underlined by a fall in European shares and the single currency late in the day amid reports that the European Central Bank was cutting off its funding lifeline to Greek banks that had failed to amass enough capital to protect them from future losses. "We have been through a big global financial crisis, the biggest downturn in world output since the 1930s, the biggest banking crisis in this country's history, the biggest fiscal deficit in our peacetime history and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution," he said. With a second election in Greece called for 17 June, King dropped a strong hint that the Bank would take fresh steps to stimulate growth if policymakers in Europe failed to deal with the sovereign debt crisis. That has been corrected to 5% of EU output. European Central Bank (ECB) Governor Mario Draghi and Spanish Prime Minister Mariano Rajoy both said on Wednesday they wanted Greece to remain in the euro.
– Europe has hundreds of billions of reasons to try to keep Greece from unceremoniously ditching the eurozone. If Greece leaves, the rest of Europe would face catastrophic losses, Reuters reports. Greece would default on the roughly $250 billion in debt held by the ECB, IMF, and other eurozone nations, and that loss will likely be "high enough to eliminate the ECB's capital," one investor said. And the losses wouldn't end there because Europe would still probably have to prevent a total collapse or risk economic contagion. How bad could it get? One Guardian estimate puts the total cost at $1 trillion. But it's looking increasingly unlikely Greece will abide by its bailout deal; new elections are looming, and polls favor Alexis Tsipras' far-left party. In a BBC interview, Tsipras urged Europe, and particularly Angela Merkel, to "stop playing poker with the lives of people" by demanding such harsh austerity measures. That defiance has some European decision-makers pushing to rip the Band-Aid off and boot Greece. "It's going to hurt, absolutely," one diplomat tells Reuters. "But is it going to be lethal?"