How does the Greek debt crisis impact the United States?

Reporting from Washington —  In 2010 and 2012, the Eurozone’s debt problems shook global stock markets and sparked fear of a financial contagion that might derail America’s fragile economic recovery.

Both times the crisis eased, but not before swiping a little bit of confidence and economic growth.

Once again, a financial crisis in Europe has flared, and this time a Greek exit from the euro group looks very possible. Financial markets have fallen in recent days, and many are nervous about how this will unfold.

But most agree that the impact in the U.S. is likely to be small. Here are answers to some common questions about the crisis:

How are conditions today different from those three years ago?

Although global markets have taken a hit in recent days, there are no signs of widespread panic outside Greece. One key factor is that unlike a few years ago, investors and analysts aren’t as worried about a collapse in Greece spreading to larger Eurozone countries. Borrowing costs in Italy and Spain, two major economies that have also struggled with bloated debts, have risen some but haven’t surged as they did several years ago when they caused major financial and political turmoil.

The difference is that Greece’s debt, held mostly by private creditors in 2010, has since been absorbed by government agencies and international organizations, including the European Central Bank. And the ECB has committed firepower to buy government bonds to hold down rates should there be a massive investor sell-off, something it hadn’t done before. In autumn 2012, Eurozone countries also set up a crisis-resolution mechanism with a lending capacity of 500 billion euros as a firewall to guard against contagion to other euro member states.

What is the likely effect on the U.S. economy?

The U.S. has very little direct exposure to the Greek debt crisis. At the end of last year, U.S. banks had claims of about $12.7 billion on Greece, including its banks. American taxpayers have some limited exposure in that the U.S. is a shareholder of the International Monetary Fund, which is a creditor of Greece. But under the IMF’s arrangement, it is expected to be paid back in full eventually.

The volume of American exports to Greece is a speck, totaling $772 million last year out of total U.S. merchandise exports to the world exceeding $1.6 trillion, or less than .05%. A prolonged Greek debt crisis, however, is likely to slow an already sluggish European economy, which in turn could crimp U.S. exports more significantly. A little more than a fifth of American exports are to Europe, and many U.S. companies with operations on that continent already have felt a pinch to their earnings from weaker sales and the strong dollar, a result partly of the European Central Bank’s pumping more money into the economy.

What can the U.S. do about the problems in Europe, and what leverage does the government have?

In a word, little.

For several years, the Obama administration has repeatedly urged the Eurozone to strengthen its institutional framework while taking an approach in Greece and with other troubled countries that calls for balancing growth measures with policies aimed at fiscal belt-tightening. But though they listen politely, European leaders have made clear that this is a problem to be dealt with in Brussels, not Washington.

How will the Greek debt crisis affect Federal Reserve policies on interest rates?

The Fed’s leader, Janet L. Yellen, raised some caution last month about the situation in Greece: “To the extent that there are impacts on the euro-area economy or on global financial markets, there would undoubtedly be spillovers to the United States that would affect our outlook as well.”

At the moment, however, the problems in Greece aren’t likely to weigh heavily on the central bank as it considers raising interest rates for the first time in nearly a decade. The Fed’s primary concern is the performance of the U.S. economy, and indicators of late have been mixed, suggesting that policymakers may want to wait a little longer and to feel more confident about the job market and inflation trends before raising rates.

What does the crisis mean for American consumers and investors?

In the short term, financial markets are likely to remain volatile. In recent days, U.S. stocks have fallen, although not as much as in Europe. Still, further declines could be expected to cut into consumer confidence and possibly spending.

At the same time, oil prices have retreated again, in part because of expectations that Europe’s trouble will slow demand a bit. Lower energy costs would, on net, be a positive for American consumers, although that may prove to be short-lived.

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