Some of the world’s biggest financial institutions predict the so-called Grexit (stands for Greek exit from the Eurozone) after the recent referendum conducted over the weekend. The referendum resulted in the NO answer to the offer made by the troika of lenders, Market Leander reports. It is reported that the list of banks predicting the Grexit includes JPMorgan Chase & Co, Barclays, Societe Generale and the Royal Bank of Scotland .
For instance, the Royal Bank of Scotland estimate the likelihood of such a scenario as 55%. The recent prediction was only 40%.
Angela Merkel and Francois Hollande are going to meet on July 7th to discuss the unexpected state of affairs and to workout an efficient solution to resist the possible negative consequences. They assume that the results of the nationwide referendum in Greece should be treated with respect and taken into account.
It seems like even though the Greeks want to stay in the Eurozone they are not ready to pay such a huge price for that and prefer a default and a Grexit to salary and pension cuts along with tax hikes and structural reforms required by the lenders to keep on saving Greece.
Still, in order for the Grexit scenario to manifest itself, Athens will have to ask for it. The talks ended on June 27th after Greece announced the referendum. The parties have failed to compromise – Greece doesn’t want austerity while the lenders do not want to extend the financial aid to Greece without such conditions. Apparently, the results of the recent referendum undermined Greece’s position in the EU and the Eurozone even despite the fact that Aleхis Tsipras managed to gain people’s support.
The economic and financial situation in the country has deteriorated dramatically as there is no trust in local banks and other financial institutions. The economy is standing still. The thing is that the majority of companies in Greece are small-scale and mid-scale businesses, which has been unable to function properly over the last 10 days.
More and more experts say that Greece should accept the conditions put forward by the lenders and beg for financial support. Otherwise, it is going to see a devastating collapse turning into an economic, financial and political disaster.
Still, there are those who predict that Greece may still remain a Eurozone member even despite the default. They say this is an ideal scenario while it is hard to understand why. They offer European leaders to compromise and understand that while most Greeks want to stay in the Eurozone, they are seek and tired of 5 years of austerity brining nothing but financial struggle, misery, lower standards of living and higher unemployment. There should be another solution. The solution must be efficient in terms of backing an economic recovery in Greece to make it get rid of the budget deficit and the huge debt. It is up to European leaders and the troika of lenders to save Greece, they say.
