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The thrashing about by Greece’s Radical Left SYRIZA-led government, with money running out, is increasing belief Greece will go bust and leave the Eurozone, world press reports say.

Greece Scrambles For Deal With Noose Around Its Neck

Toronto Globe and Mail – Michael Babad

Greece is scrambling today to end a stalemate with its lenders and head off what some observers warn could be bankruptcy.

According to several reports, negotiators for the government and its various creditors have stepped up talks with the goal of reaching a deal by Sunday.

Greece’s new government, which recently overhauled its bargaining team, faces a mid-May payment of some €750-million to the International Monetary Fund.

Prime Minister Alexis Tsipras, recently elected on an anti-austerity platform, is pushing for an agreement, so much so that he recently removed his finance minister, Yanis Varoufakis, from an aggressive role in the talks.

Greece’s lenders are looking for a package of hard and fast reforms where pensions, taxes and the labour market are concerned, and Athens appears to be trying to meet some of the goals.

“The Greek government is ready for an honest solution which will unlock financial aid from partners and put an end to the economic asphyxiation the bailouts have caused,” Mr. Varoufakis reportedly told a radio interviewer.

Of course, we’ve been here before many times since the Greek debt crisis erupted years ago.

“Greece is still grabbing traders’ attention, and Athens has softened its negotiating teams by taking Yanis Varoufakis off the front line, but the nation still has a noose around its neck in terms of its debt levels,” said market analyst David Madden of IG in London.

“Greece still has to hammer out a deal with creditors over reforms in order to receive the next round of financing, which will then be used to make repayments,” Mr. Madden added today.

Most Investors See Greece Leaving Eurozone

Bloomberg – Ian Wishart

Greece, mired in a protracted financial crisis and at loggerheads with its bailout stewards, will leave the euro, according to the majority of investors, analysts, and traders in a Bloomberg survey.

Fifty-two percent of the respondents in the Bloomberg Markets Global Poll believe the cash-strapped country will leave the 19-nation bloc at some point, compared with 43 percent who see Greece remaining in the euro for the foreseeable future. In answer to the same question in mid-January, just 31 percent of poll respondents predicted a Greek exit and 61 percent had the country staying in.

The downbeat assessment of Greece’s prospects, more than five years after the country’s first bailout, comes as the country stands on the edge of a financial abyss.

Prime Minister Alexis Tsipras has so far failed to squeeze a loan payment out of his country’s institutional creditors as he sticks to his pledge to dial back austerity, while the nation’s banks stay on European Central Bank life support.

“The banking sector is Greece’s Achilles heel, and if the ECB decides to stop funding, then the situation will be even more fragile than it is at the moment,” said Diego Iscaro, a senior economist at research company IHS Global Insight in London. “That could trigger an exit—eventually.”

Having lost access to capital markets and being ineligible for the ECB’s regular financing operations, Greece’s banks are reliant on the ECB-approved Bank of Greece Emergency Liquidity Assistance.

Eighteen percent of respondents in the April survey predict a departure this year, with a further 22 percent saying a Grexit would come before the end of 2016. An additional 12 percent said that while the country will battle through its most immediate difficulties, it will leave the euro area at some point after 2016.

The Horrific Consequences of Greece Leaving the Euro

Business Insider – Mike Bird

What happens if Greece has to quit the euro?

The prospect of Grexit seems more realistic now than at any time since the worst days of the euro crisis — if not more realistic now.

Bank of America Merrill Lynch’s analysts held a roundtable on the potential impact of a Greek exit from the euro. Though it is not what they seem to be expecting, they say it is now time to “start thinking what used to be unthinkable.” …

And according to BAML’s Athanasios Vamvakidis, the bank’s chief G10 FX strategist in Europe, based on the example of Argentina’s devaluation and the typical similar emerging market crisis, the new Greek currency could be devalued by 50% after a Grexit …

Nobel Prize-winning economist Christopher Pissarides said Wednesday that Grexit “would mean the biggest haircut of wages ever, because most products that we consume in Greece are imported, and their prices will be in euros.

The post World Press View: Greece’s Euro Exit Door Beckoning appeared first on The National Herald.

Source: The National Herald
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