Greece's exit from the eurozone is probable but manageable for other countries. These the estimates by Citigroup analysts who assign the scenario of an exit of Athens from the monetary union between 50% and 75%. But if this option remained isolated to the Greek case, it would be easily manageable according to the US financial giant. Citi estimates that the combined public and private sector exposure to Greece's exit from the euro is €410 billion. Of which 360 billion would weigh on the accounts of the European Central Bank (ECB), the European Financial Stability Facility (EFSF), the European Union (EU) and the International Monetary Fund (IMF).
Il “higher risk” remains “the prospect of capital flight from the other weak countries of the monetary union”, reads the report. Just think that the withdrawal of capital from Athens is already worse than that recorded in Argentina during the 2002 crisis. According to Citi economists the ECB should provide 800 billion euros of liquidity to be able to deal with the possibility of capital outflows from other peripheral countries and to refinance debt in Ireland, Spain and Italy. However, for US economists, there is evidence that these three peripheral countries have shown greater resistance to the capital outflow that has been recorded.
Matt King, credit strategist of the US giant, is concerned that the process of capital flight from these two countries is already underway if one also takes into account the percentage of governments in foreign hands. “If capital flight from Italy and Spain were to reach the average already seen in Greece, Ireland and Portugal, then another 215 billion would leave each of these countriesCiti says.
Le measures to avoid an excessive outflow of capital abroad, the European authorities should envisage new ones liquidity injections (Ltro) jointly with increased purchases of government bonds, offer deposit guarantees, recapitalize the banks, establish lower rigor requirements, further cut interest rates, study new aid packages to the Troika, and increment i funds earmarked for bailouts. “New policies aimed at preserving the monetary union in the face of the possibility of a Greek exit from the euro could provide considerable, albeit temporary, impetus to the market,” concludes the report.
But in the meantime, European leaders continue to declare that they will try in every way to avoid this scenario. Italy is determined to support Athens and the premier Mario Monti, meeting in Brussels Antonis Samaras, leader of the Greek pro-bailaut party New Democracy, hhe hoped that the voters would confirm their pro-European will. More pragmatic instead the Deputy Minister of Economy Vittorio Grilli. The minister stated that "we are committed to preventing” Greece from abandoning the euro, but “we must be ready in any case”.
