As markets prepare for the prospect of a Greek exit from the euro, one prominent British economist says Greece could face a military coup if it abandons the single currency.

Financial markets have been sold down amid speculation Greece will have to leave the eurozone and abandon its debts.

But Sav Savouri, chief economist at London-based hedge fund Tosca Fund, says the country has little option but to remain in the 17-member currency bloc because the situation will be very bleak if it leaves.

Mr Savouri had a grim view of the outlook for the country if Greece returned to the drachma.

"The elderly and the infirm simply can't feed themselves, the black market expands to proportions that you don't see in Europe, the young professionals leave in their droves," he said.

"You're left with a collapsing civic society, and in every instance where that's happened the military will take over the role of government."

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He also has made the bold prediction that the Australian dollar could hit $US1.70 by 2014.

The dollar dropped below parity with the greenback this week as investors fled riskier currencies amid the worries about instability in Greece.

But Mr Savouri believes Australia and Asia will be sheltered from the political and economic turmoil in Europe due to the rise of China.

"The rise in the Aussie dollar... will be a rise that happens across the Asian currency base," he said.

"It wouldn't just be the Australian dollar that goes up, it will include other currencies including the Indonesian rupiah. And the catalyst will be China breaking loose from its fixation with a link to the US dollar."