PARIS (AFP) ― A government which refuses to pay its debts, bank runs and investors fleeing: that is what a Greek exit from the euro, or a “Grexit,” would look like according to economists, although most still believe it is unlikely.

Europe has seen this drama played out several times since Greece’s first bailout in 2010: a difficult event for Athens, a more or less official comment coming from Germany, markets tanking on Grexit speculation.

This past week the plot was the same: the German magazine Der Spiegel reported that Chancellor Angela Merkel was ready to let Greece exit the eurozone in the event that the far-left Syriza party wins the Jan. 25 election and reverses the government’s austerity policies.

Poll-favorite Syriza, led by Alexis Tsipras, has made it clear it opposes more austerity for Greece, which the “troika” of the EU, ECB and IMF imposed in exchange for the 240 billion euros ($285 billion) in bailout loans. Syriza has left open the option of defaulting on the country’s massive debt.

The markets reacted quickly to the German comments.

Investors dumped European equities, with the Madrid stock index dropping 3 percent on Monday, Paris 3.3 percent and Milan 4.9 percent; and sent the euro to a nine-year low.

They snapped up the relatively safe-haven investments of French and German government bonds, sending Paris and Berlin’s borrowing costs to record lows.

In his blog, French economist Alexandre Delaigue has sketched out the scenario that investors are worried about. “The negotiations between the new Greek government and the troika bog down. As a debt payment becomes due, Athens refuses to pay. That worries everyone, with Greeks rushing to withdraw their savings from banks fearing the country will exit the euro and investors withdraw their capital,” Delaigue wrote.

Bled dry, Greek banks appeal for urgent aid from the European Central Bank.

“If the ECB sets conditions (for the government) and Syriza refuses, then suddenly euros issued by the Greek central bank cease to be the same as other euros,” which is a de facto Greek exit from the euro.

Athens “would need to put in place controls to prevent capital flight, issue new money that would rapidly drop in value against the euro, which would make inevitable a total default on debt denominated in euros,” wrote the economist.

The European Commission insists that membership in the eurozone is legally “irrevocable.”

But “even if there isn’t a clause” in any European treaty about a country quitting the eurozone, “it’s possible to find a legal mechanism” to do so, said Janis Emmanouilidis at the European Policy Center think-tank.

The most drastic solution, and one which is foreseen by treaties, is for a country to leave the European Union.

Few analysts believe this chain of events is likely in the immediate future.

Joerg Kraemer and Christoph Weil at Commerzbank noted that Tsipras has yet to win the election, and in any case “neither Syriza nor the European Union want an exit from the eurozone.”

They will likely come to a “bad compromise,” keeping Greece in the eurozone “after an exhausting game of poker,” said the Commerbank economists, who put the chance of a Grexit at one in four.

For Christopher Dembik at Saxo Banque, Greece “won’t leave the eurozone today nor tomorrow, but over the long term the question is open” due to its loss of competitiveness given the country’s heavy debt load and the “mistake of the blind austerity” policy.

And the question is not only about Greece, but the survival of the eurozone.

“Historical precedents show that it is nearly impossible to keep a monetary union intact once the process of disintegration has started,” he said, pointing in particular to the collapse of the Austro-Hungarian empire.

Delaigue does not exclude the possibility that given the rise in popularity of far-left parties in Spain and Italy, and the extreme-right in France and Germany, that European governments will be tempted “to make an example of Greece: Either a country stays in line or it will be thrown out, preferably in the most painful manner.”