AllianceBernstein outlines three scenarios for Greece
The eurozone could “muddle through”, it could perform an orderly write-off of Greek government debt, or there could be a disorderly default. These are the three scenarios facing Europe’s monetary and fiscal authorities says AllianceBernstein in a note from its Global Economic Research unit.
Darren Williams, senior european economist Global Economic Research, says in his note that a disorderly default is still unlikely, but that it is more difficult to predict whether the outcome will fall to an orderly default of continued “muddling through”.
“Should the crisis become truly systemic, we would expect the ECB to act as a lender of last resort – but only reluctantly and not preemptively,” he writes.
He adds: “It is increasingly unlikely that the euro area will be able to survive in its current form.”
If current negotiations between Greece and other euros members and the IMF fail to reach agreement by 3 October, then Greece will run out of money by the middle of October, Williams suggests.
To read the full research report click here:[asset_library_tag 3433,Three Scenarios for Greece]