It is more than obvious that a chaotic departure from the euro will be a Greek tragedy in which we will all suffer.

European shares sank to a four and a half month closing low on Monday as political deadlock in Greece made the country's exit from the eurozone look more likely than ever.

The reluctance Greece is exhibiting in swallowing the bitter pill of austerity is alarming.

But the alternative is no less painful. Even though a return to its own currency will in theory enable Greece to sharpen its export competitiveness, the eventual devaluation by an unpredictably large margin may prove as painful as those belt-tightening measures.

For the eurozone as a whole, the exit of Greece would not only bode ill for other weaker members but also arouse further public opposition to bailouts in the rich countries.

The borrowing costs of Italy and Spain are already on the rise and cannot be held down for long with more cheap loans from the European Central Bank.

For the world economy, lasting economic uncertainties in Europe, not to mention the risk of contagion from a Greek exit that would infect Portugal, Ireland and even Spain and Italy, would be enough to turn the ongoing global recovery into recession.

Worse, if policymakers in debt-laden countries cling to super-loose monetary policy as an easy way out, instead of fixing their structural problems, the shockwaves will come sooner and scarier than expected.

It is said that the massive stimulus programs that the international community jointly carried out in wake of the 2008 global financial crisis saved the world from a scenario that could have been much more ugly.

That may have been true then. But if policymakers continue to regard buying time with cheap money as their sole obligation, that initial success will turn out to be just the prologue to a real human tragedy.

It is highly probable that the fragile global recovery will come to an abrupt end unless policymakers within and beyond Europe stop buying time with easy money and begin implementing painful but necessary long-term solutions.

What's happening in Greece should be the signal for policymakers to begin the urgently needed structural reforms.

(China Daily 05/16/2012 page8)