Tags: greece | greek | euro

Citigroup Economist Sees 50% Chance of Greece Exiting Euro

Monday, 06 Feb 2012 04:27 PM

Citigroup Inc. Chief Economist Willem Buiter said the possibility that Greece will leave the euro area in the next 18 months has increased to 50 percent from 25 percent to 30 percent.

The willingness of creditors to support Greece has “fallen substantially,” economists Buiter, a former Bank of England policy maker, and Ebrahim Rahbari, said in a research note Monday. They projected the costs of a Greek exit to the rest of the euro area as “moderate” because contagion would be “contained by policy action, if needed.”

“We think that the Greek government will achieve an orderly but most likely coercive debt restructuring,” Buiter and Rahbari said.

European leaders stepped up pressure Monday on Greek politicians to meet the conditions of a 130 billion-euro ($171 billion) bailout, saying time was running out.

French President Nicolas Sarkozy met German Chancellor Angela Merkel in Paris as Greece’s interim prime minister, Lucas Papademos, prepared to negotiate with the so-called troika of international lenders in Athens for a second day. A gathering of Greek political leaders was delayed until tomorrow as they struggled for a unified response.

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2012-27-06
 

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