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S&P: “One in three” chance that Greece will leave eurozone

Standard & Poor’s analysts, along with other industry insiders, say they foresee a Greece exit as 30 to 50 percent likely.

Greece imf bailout 2012 03 15Enlarge
The EU and Greek flags fly in front of the Parthenon in Athens, Greece on February 17, 2012. ( Oli Scarff/Getty Images)

Standard & Poor’s analysts believe that Greece has a one in three chance of leaving the 17-country euro area in the next few months, the ratings agency said in a report released today, Bloomberg News reported.

"Such an outcome would, in our view, seriously damage Greece's economy and fiscal position in the medium term and most likely lead to another Greek sovereign default," S&P said, according to Reuters.

Greece voters head to the polls again on June 17 following an inconclusive vote on May 6, Agence France-Presse reported.

According to the AFP:

The June 17 vote has turned into a straight vote on the pact and the associated austerity measures, with the latest opinion polls showing those pro and against in a tight race which could have untold consequences for the future of the eurozone.

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A Greek exit could occur following “Greece rejecting the reforms demanded by the troika – the European Commission, International Monetary Fund and European Central Bank – and a consequent suspension of external financial support," S&P said, according to Reuters.

S&P analysts are not the only Eurozone-watchers making predictions. According to Bloomberg News, Citigroup Inc. economists are assuming as a "base case" that Greece will leave on Jan. 1, 2013, and Nomura International Plc said in a note last week that the chance Greece will exit is "marginally above 50 percent."

If Greece goes, S&P analysts don’t expect a rush to the exits by other struggling EU members, Reuters reported.

"We believe that the hardships the Greek population would suffer were Greece to exit would dissuade any other member state from following suit," S&P said in the report, according to Reuters.

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http://www.globalpost.com/dispatch/news/regions/europe/120604/sp-one-three-chance-greece-will-leave-eurozone