As it so happens, none of the major investment banks really view this
weekend's election results out of Greece as having much impact on
whether the country will exit the eurozone or not.
Citi leaves their odds of a Greek exit between 50 and 75 percent over the next 12-18 months. Jurgen Michels wrote earlier today:
Citi leaves their odds of a Greek exit between 50 and 75 percent over the next 12-18 months. Jurgen Michels wrote earlier today:
While the outcome of the election,
and the likely agreement on an ND-led government has reduced the risk of
an exit in the very near term, with the large role of SYRIZA in
Parliament and its power to organize protest against further austerity
measures and far-reaching structural reforms on the streets, it looks to
us unlikely that Greece will be able to fulfill only slightly amended
conditions of the MoU.
Morgan Stanley still has the chances that Greece leaves the euro at 35 percent over the next 12-18 months, but that could change. Cross-asset strategist Greg Peters writes in a note today:
To the extent that a government
willing to cooperate with Europe emerges, the probability of a near-term
eurozone exit, which we put at 35% over 12-18 months, will diminish --
regardless of whether this government can comply with the conditions.
This is because Europe could at least say that Greece is back on track,
perhaps with a slightly different programme given a a deeper recesision
than expected; and the Greek politicians can present a somewhat milder
adjustment path to the Greek people.
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