“The Troika is likely to delay the disbursement of the next tranche of the program. Note that for the second quarter of 2012, disbursements of 31.3 billion euros ($40.7 billion) from the bailout program are scheduled,” he said. “If Greece does not make progress, in a second step, the Troika is likely to stop the program. If that happens, the Greek sovereign and its banking sector would run out of funding.”
As a result, Greece would be forced to leave the euro area, according to Menuet, who said the chances of such an outcome are now rising fast.
“With the outcome of the election, to us the probability of a Greek exit is now larger than our previous estimate of 50 percent, and rises to between 50-75 percent,” he said. “However, even after the elections in Greece, France and Germany, we regard the probability of a broad-based break-up of the monetary union as very low. We continue to expect that in reaction to Greece leaving the euro area, more far-reaching measures from governments and the ECB would be put in place.”
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