Investors Expect A Grexit, But Remain Calm


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German research firm Sentix released a survey on Tuesday which showed that nearly half of the participating investors believe that Greece will exit the eurozone within the next year.

The figures showed that 48.3 percent of those surveyed saw the nation leaving the block by April 2016, proving that promises from EU policymakers that a Grexit was not on the table has fallen on deaf ears.

Talks Deadlocked

With only weeks to go before the Greek government runs out of cash, talks between Athens and its creditors appear to have reached a stalemate.

Greek Prime Minister Alexis Tsipras has remained adamant in his refusal to cut pensions and carry out other reforms the rest of his EU counterparts say are necessary in order to unlock the funding.

Markets Calm

With Athens and the EU looking unlikely to make a deal in time, Greece was probably expecting widespread panic in the markets to help persuade EU finance ministers to give in.

However, despite the rising possibility of a Grexit, markets have remained relatively calm.

EU Protected Against Contagion

Most believe that a Greek exit may not be the "Armageddon" it was once perceived to be. For Greece, an exit from the eurozone will have disastrous repercussions, but for the rest of the bloc it may not disrupt markets significantly.

For one, the bloc has created several safety nets to guard against another financial meltdown, including the European Stability Mechanism. Additionally, the European Central Bank's recent quantitative easing program will help insulate other eurozone economies from Greece's financial woes.

May 9 Deadline

This week, Tsipras vowed to make a deal with creditors by May 9, just days before Athens is due to make another loan repayment to the International Monetary Fund.

While he has repeatedly said it would be in everyone's interest to keep Greece in the eurozone, he also promised to hold a referendum on the nation's membership if creditors' demands for more austerity cuts are not eased.


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Posted In: EurozonePoliticsTop StoriesGeneralAlexis TsiprasGreeceGrexitSentix