Grexit is a portmanteau of the words “Greece” and “exit,” and refers to the hypothetical scenario of Greece leaving the eurozone.
The term was first used in 2012 when Greece was facing a severe economic crisis during the European Debt crisis.. At the time, there was speculation that Greece might be forced to leave the eurozone in order to avoid defaulting on its debts.
Grexit was coined by Citigroup’s Ebrahim Rahbari in February 2012 and first came out in a paper written by Rahbari and Citi Chief Economist Willem Buiter.
Grexit would have a number of consequences for Greece and the eurozone.
For Greece, it would mean a loss of access to the euro, which would make it more difficult to borrow money and trade with other countries.
It would also mean a sharp devaluation of the Greek drachma, which would make Greek exports more competitive but would also make imports more expensive.
For the eurozone, Grexit would be a major setback. It would undermine confidence in the euro and could lead to other countries leaving the eurozone. It would also damage the eurozone’s economy, as Greece is a significant trading partner for other eurozone countries.
In the end, Greece managed to avoid Grexit, but the possibility of it happening still hangs over the eurozone.