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Citigroup: Greece probably to leave eurozone next year

Three eurozone nations will have to restructure their government debt next year, and Greece will probably exit the eurozone, Citigroup predicts. Italy, Spain and Greece will need debt restructures next year, Michael Saunders, Citigroup’s chief European economist believes.

The same forecast is true of Ireland, Portugal, Cyprus and Slovenia by 2017. The group said in a closed report obtained by some media outlets that it expects Greece’s exit from the eurozone and a series of sovereign debt restructures. The moves will be accompanied by steps towards tighter integration among European Monetary Union countries.

Grim Predictions from … outer space

In its 28-page report “European Economic Forecast Highlights” the Citigroup forecasts recession of even 11.8% in 2014, unemployment of even 40% in 2015 and debt of 453.2% of GDP in 2014!

Recession: 7.2% in 2012, 7.4% in 2013, 11.8% in 2014, 3.7% in 2015. Return to growth in 2016 (1.6%) and 2.8% in 2017.

Unemployment:
24.6% in 2012, 29.7% in 2013, 35.9% in 2014,  40.3% in 2015 and το 2016 and 39.3% in 2017.

Debt to GDP: 
 178% in 2012, 192.8% in 2013, στο 453.2% in 2014, στο 451.8% in 2015, στο 417.4% in 2016 and 145.4% in 2017.

The Citigroup keeps at  60% the options that Greece would exit the eurozone within the period of next 12 to 18 months.

Greek Debt Sustainability

At the same time, rating agency Moody’s expressed doubt on the sustainability of the Greek debt despite the Eurogroup deal on Monday.

“Greece΄s debt remains unsustainable despite short-term relief from this week΄s deal with major creditors, and Athens will probably need some of the principal on its debts reduced eventually, Moody΄s Investors Service said Thursday.

Tuesday΄s deal with euro-zone finance ministers and the International Monetary Fund, unlocking the next 44 billion euros ($57 billion) in loan payments from Greece΄s bailout, “will provide relief to the liquidity-starved Greek economy, but we believe that the country΄s debt burden remains unsustainable,” Dow Jones Newswires reported citing Moody΄s credit report.

“The probability of a further default on privately held debt is high, and given that around 70% of the total debt stock is held by official creditors, only a reduction in principal on outstanding official debt would lead to a semblance of sustainability in Greece΄s debt,” the ratings company said.” (Full Story)

Didn’t everybody say on Monday that the deal secures that Greece will remain in the euro zone?

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10 comments

  1. Finally it comes. Farewell to the euro. Welcomes to the Drachma . Let the past passes, and rebuild everything again. Lots of pain at first, then things will get better, hopefully between 3 to 6 years.

  2. with the same people in the system, you will wish you were born in another country. but you don’t live here, do you?

  3. Didn’t everybody say on Monday that the deal secures that Greece will remain in the euro zone?

    they “mispoke” What they really meant is that Greece will now stay in the Eurozone long enough for them to completely cover their backsides, and once done, Greece can go to hell. If they don’t manage to put it there before 2013..

  4. Then the elite and the politicians will be richer than ever and the poor poorer than poor. The elite will have their bank accounts in Switzerland and will be multi-multi-multi-billionairs if Greece go back to Drachme, they would buy whatever is not theirs yet in Greece. This is really no option for the Greek people!

  5. they mispoke, I misunderstood ( I was half asleep on the couch). thanks for the clarification

  6. that’s what I mean @Jackie (but too lazy to write it down. thankful for KTG-ians with supplementary duties 🙂 )

  7. Couch is about the only sane place to be. Stay put, a brave new world will pass by at some stage. Not just yet…

  8. Look! Greece joined EU in 1981-82, in this 30 years period, Greece still has not yet industrialized like Taiwan or South Korea. Its main industry is tourism. Besides this, hardly there is anything else but tourism. I haven’t seen a product made in Greece. Maybe there are some out there, but I’ve seen one yet.

    I know that most Greek ‘d like to remain in the euro. But the idea of a common current is rooted from a compassion for all in the europe continent?, or it is a scheme to consolidate full control over the european continent. Fishes don’t bite bare hooks. Thats’ why people cover the hooks with attractive baits to lure the fishes.

    The current Greek government won’t take care of the people. Therefore, some how people has to form new one. Greek bloggers should convene either at somplace or on-line to discuss what they can do to help change the current situation. This fight requires unity. One can’t fight it individually. Unity creates power. The more people come together, the more powerful of a force they become.

    P/S: Luckily I’m not in Greece. If I were, I would have swam to Nice, France. 🙂

  9. united Greeks? I WANT to SEE THAT!

  10. Either that, or if it’s too painful, then pack up and move West if you have family/relatives in the West.
    I just humbly pray that this calamity soon gone for the people there.