June 29, 2015 / 3:25 PM / in 2 years

Chances of Greece euro exit balancing on a knife's edge: Reuters Poll

LONDON (Reuters) - Greece is almost certain to miss a 1.6 billion euro payment to the International Monetary Fund on Tuesday but it’s touch-and-go whether it will have to leave the euro zone, a snap Reuters poll found.

Euro coins are seen in front of a displayed Greece flag in this photo illustration taken in Zenica, Bosnia and Herzegovina, June 29, 2015. REUTERS/Dado Ruvic

The poll of more than 70 economists and traders, taken on Monday after talks between Athens and its creditors broke down, concluded there was a median 90 percent probability Greece misses Tuesday’s repayment.

But while the probability of Greece leaving the euro zone rose sharply to 45 percent from 30 percent just a week ago, the consensus remained - just - that Athens will stay in the euro zone.

“Greek debt negotiations will go into extra time at the end of extra time, and it is still conceivable that a solution can be found at the final, final minute to take the whole crisis into a replay a few months down the road,” said Kit Juckes at Societe Generale.

“Or disaster might strike.”

Over several months of Reuters polls the probability hovered around just one-in-three but 48 of 72 said the risk Greece abandons the euro had gone up significantly while 21 said it had risen very significantly.

One even said it was now almost inevitable Greece leaves and only two said there had been no real change since the dramatic last-minute breakdown of talks over the weekend.

The IMF, European Union and the European Central Bank insist Athens must accept reforms to repair its finances in return for another bailout that would help it meet its debt obligations.

Hopes for a last-minute breakthrough are fading fast after Greek Prime Minister Alexis Tsipras, who says the reforms would deepen the country’s economic woes, angered international lenders by announcing a snap referendum for Sunday on the terms of a cash-for-reforms deal.

A majority of Greeks favor accepting a bailout deal with international lenders, according to two opinion polls conducted before Tsipras announced the surprise referendum.

Greece is expected to keep banks shut at least until after the July 5 referendum, and withdrawals from automated teller machines will be limited to 60 euros a day when they reopen. The stock exchange will also stay shut.

Cyprus initiated capital controls on its banks in 2013 after a banking crisis and a subsequent bailout deal with the European Union and the IMF. The restrictions, which were less stringent than the ones just introduced by Athens, were lifted in April.

According to the vast majority of respondents in the poll Greece would be able to leave such restrictions in place for a long period of time and still emerge from them as a member of the currency union.

Many top banks in the region were reluctant to answer any questions about Greece, with one euro money market trader at a large dealer saying: “I won’t answer questions about Greece, it’s all speculation.”

Additional reporting by Rahul Karunakar; polling by Reuters Polls Bengaluru Editing by Jeremy Gaunt.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below