If Greece left the euro, living standards would plummet, incomes would be slashed by more than half, and inflation and unemployment would skyrocket, the country's biggest bank warned on Tuesday, as daily Athens News reports.

In a 16-page report, the privately owned National Bank of Greece said the risk of a Greek euro exit was no longer just a theoretical possibility, warning that the fallout from such a move would be dramatic.

"An exit from the euro would lead to a significant decline in the living standards of Greek citizens," the NBG wrote.

The bank said per capita income would collapse by at least 55%, the new national currency would depreciate by 65% against the euro and a recession, now in its fifth year, would deepen by 22%.

Painting a dire picture of a post-euro landscape, it added that unemployment would jump to 34% of the work force from around 22% now and that inflation would rise to 30% from its current level of 2%.

As a result of difficulties in accessing foreign currency, the country would default on the biggest part of its debt obligations to its borrowers (325 billion euros), with obvious negative effects on bilateral trade and foreign business transactions, the report said.

All these consequences would be much harsher in a scenario of a rough transition to a new currency, the bank's analysts said in the report.

They stressed that the strategy of the economic programme accompanying the new borrowing agreement is multidimensional with many benefits.

The programme, they said, offers time to implement reforms, offering an unprecedented level of funding (almost 150 billion euros up to now and another 90 billion euros by 2014) on favourable terms, while the successful completion of bond swap (the PSI programme) will cut the state debt by 50% of GDP and significantly lower debt cost servicing for the next decade.

At the same time, the report said, the programme ensures ample liquidity for the domestic banking system through the Eurosystem. The NBG is due to report its first quarter earnings on Wednesday and is expected to announce a loss.