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Greece's crisis: the endgame scenarios

Friday, June 19, 2015 - 02:07

A British betting firm has re-opened its book on whether Greece will leave the euro zone by the end of this year. As talks stall with creditors, the odds of a 'Grexit' look more likely than before. Ivor Bennett reports on the possible outcomes of the Greek drama.

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In Greece it seems, many have already made up their minds. The queues at the cashpoint a sign they're betting on a Grexit. They're not the only ones taking a gamble. British betting firm William Hill has reopened its book on the saga. Offering odds of 9-to-4 that it will leave the eurozone by the end of the year. That implies a 31 percent chance - up from April's odds of 3-to-1 and 25 percent, when the firm had to shut the book due to high demand. But without any mechanism for an exit it would be a messy business, says Carsten Brzeski, Chief Economist at ING Germany. (SOUNDBITE) (English) CARSTEN BRZESKI, CHIEF ECONOMIST ING GERMANY, SAYING: "You would see the population suffer, there would be an enormous loss of purchasing power. Fiscal austerity would have to continue. And many Greeks would end in more poverty than they are now." There is still a strong chance that could be averted though. Odds of 1-to-3 that Greece will stay in the euro zone, reflecting a 75 percent probability For that to happen, it may need a euro fudge. Not exactly a technical term, but an accurate description for papering over the cracks. (SOUNDBITE) (English) CARSTEN BRZESKI, CHIEF ECONOMIST ING GERMANY, SAYING: "The euro zone will pay a little bit of money, so that Greece can piece by piece actually fulfill its payment obligations. This fudge unfortunately also includes that the Greek saga will not be over. We will probably still be discussing Greece and the willingness to reform over and over again in the coming months.'' Greece has until the end of the month to secure funds for a 1.6 billion euro loan repayment. The fact it's struggling, doesn't bode well. It owes the ECB 6.7 billion euros by the end of August Its total debt to official lenders over 240 billion euros. There is, says Justin Urquhart Stewart of Seven Investment, another option. SOUNDBITE (ENGLISH) SEVEN INVESTMENT MANAGEMENT MARKET ANALYST, JUSTIN URQUHART-STEWART, SAYING: "What they should do is un-date it. Make it an everlasting debt. Therefore, it's still the responsibility of the Greeks, it's just that realistically they don't have to pay it back. Why not? Because they can't. Therefore you're then left with the interest payments, and that can be adjusted." Deal or no deal then? Time to place your bets.

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Greece's crisis: the endgame scenarios

Friday, June 19, 2015 - 02:07