Long time not heard. The magic word that causes hair-raising and spine-chilling to million of Greeks: GREXIT. A Canadian rating agency said on Monday it considers Greece runs a “moderate” risk of exiting the eurozone.
Canadian international ratings agency DBRS warned in its report that while the other 18 eurozone members run a “low risk” of eurozone exit, including all other countries to emerge from a bailout program, Greece continues to face a moderate possibility.
“The main factor setting Greece apart from other countries is the high stock of official external debt, which Greece will need to gradually repay via primary surpluses,” the report noted.
“Despite the favorable terms on Greece’s official debt, DBRS considers that this debt burden could again become a source of tension between Greece and its main creditors. If Greece is unable to sustain its primary surplus commitments, its creditors may be less willing to contemplate additional debt relief,” argued DBRS.
The agency warned: “If simultaneously faced with persistently weak growth, a future government could conclude that Greece has exhausted other options and the cost of remaining inside the currency area is too high.”
However, some analysts in Greece consider the DBRS scenario as ” particularly remote” even if they warn that international uncertainty predictably generates such concerns over economies such as Greece’s.
“I do not think there is a prospect of a Greek exit, this is a rather extreme scenario, but I can understand why an agency would contemplate it, when associated with country’s weak growth, the various uncertainties in the eurozone and the upcoming elections in Greece and the European Union,” Dimitris Kenourgios, associate professor of finance at the University of Athens was quoted by xinhua.
“Greece remains the weakest link in the bloc and whenever there are problems internationally they are reflected more on this country,” Kenourgios pointed out.