That would be a "major negative" for Australia's iron ore mining company profits and "disastrous" for the smaller miners with higher costs "with a corresponding impact on mining revenues and the balance of payments," Richard Robinson, BIS Shrapnel, says. The warning comes after Greece this week defaulted on its loans from the International Monetary Fund, missing a €1.5bn repayment on Tuesday after a previous eurozone bailout expired and deprived the country of access to billions of euros of funds. Bill Mitchell from the University of Newcastle says Australia is far less dependent on trade with the eurozone than with China, and our financial markets are hardly about to fail following Greece's default. "Neither will be particularly damaging for Australia, although an exit from the eurozone by Greece is more likely, given that the Chinese government, which is totally sovereign in its own currency has shown a propensity to use that capacity to ensure that growth is well managed and financial stability is retained," Mr Mitchell said.

"Most of the Greek debt is now held by European Union governments or other institutions (ECB) as a result of the 2012 default and restructure." Nigel Stapledon from the University of NSW says global financial markets have had many years to prepare for the turmoil in Greece. "Greece, with a population of 11 million, might matter a bit to the EU (albeit less than it assumes) but it certainly does not matter much at all to the world," Mr Stapledon said. "In 2008 it might have mattered, but short-term wobbles in the share market aside, seven years on in 2015 it does not matter."

But Saul Eslake sees things differently, warning if Greece were to eventually exit the eurozone – an event dubbed 'Grexit' – then Australia's currency could rise unwelcomely. "Despite our much stronger trade linkages with China than with Europe, the Chinese share market doesn't have much impact on Chinese economic activity, and is a very poor leading indicator of trends in the Chinese economy," Mr Eslake said. "Whereas 'Grexit', if it happens, could potentially have serious consequences for the European financial system where Australian banks still raise quite a lot of their financing. And 'Grexit' might provide an additional source of unwelcome upward pressure on the Australian currency." But Jacob Madsen from Monash University said Australia has much more to fear from a crash on China's stock market. Loading