European Central Bank Governing Council member Klaas Knot said on Tuesday that the situation in Greece is alarming, as a default may have a contagion effect in the Eurozone.

According to Bloomberg agency, Knot stressed in the Dutch central bank’s semi-annual Financial Stability Report that the already fragile liquidity position of Greek banks will deteriorate if deposits continue to flow out.

“An unhoped-for bankruptcy of the government would heavily derail the Greek economy” he added, noting that the “the impact of such an event on other countries in the euro-area is still uncertain.”