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A GREXIT - if it happens - should not cause alarm, given that the direct impact of a collapse of the Greek economy is not significant, said Tharman Shanmugaratnam, Deputy Prime Minister and the Minister of Finance, at the 42nd annual dinner of the Association of Banks in Singapore (ABS).
"It is too early to say if some form of Grexit will become a reality, but it is a contingency that eurozone governments and financial institutions have been preparing for," said Mr Tharman on Tuesday.
"The direct impact of a collapse of the Greek economy is not significant, even in the eurozone. The ECB (European Central Bank) and the EU are also likely to take all steps necessary to safeguard the eurozone financial system in the coming weeks."
Consequently, markets have not shown great panic, "with credit spreads, for instance, widening only marginally in the eurozone periphery", said Mr Tharman. But he noted that there could be downside risks, as economic distress might spark political and social turmoil in Greece.
This could give way to "an unpredictable interplay with the broader dynamic of geopolitical tensions", said Mr Tharman.
"Any setback in confidence could hurt a still tentative economic recovery in Europe, which will have spillover effects in the rest of the world economy," he said.
"Although the risk of a sudden brake in global growth remains low, we are closely monitoring developments and their potential impact on Singapore."
Read more on the Greek crisis here.