Citi: Probability of Greek’s Euro exit rises to 90%26 July, 2012, 17:04. Posted by Zarathustra
Tags: Euro Crisis
Citi’s Willem Buiter & Co. team has already raised the probability of Greek’s exit of the euro era in May to 50-75%, and they have even put a date for this to happen: 1 January 2013.
The team is now upping the probability of “Grexit” further from 50-75% to 90% in the next 2-3 quarters as the economy will remain in a deep recession (or depression, really):
We continue to expect Greece to endure a very deep recession this year and next – making 2013 the 5th year of sharp GDP contractions. We have increased our probability of the country leaving the euro from a range of 50% to 75% previously to about 90%, and believe the most likely date is in the next 2-3 quarters, possibly following the September assessment. Creditor countries remain unwilling to ease the terms of the rescue package, while the Greek programme remains clearly off track in many areas, notably deficit targets and supply-side reforms.