90% chance Greece will leave eurozone – Citi

The chance of Greece leaving the euro in the next year has raised to 90 per cent from the previous 50 per cent says America’s Citigroup.
Greece will drop out of the eurozone and reinstate the drachma in the next 12-18 months, according to a report published on Thursday.
Citi economists had previously put the chances of a Greek exit at 50 to 75 per cent.
To keep Greece afloat  the European Union and IMF provided 110bn euro of bailout loans in May 2010. The money would help the government pay its creditors. After that a second, 130 bln euro bailout was agreed earlier this year.
Economists calculate that Greece may need a third rescue package worth up to €50 billion. Greece started a major austerity drive involving drastic spending cuts, tax rises, and labour market and pension reforms. The majority of Greece's private creditors agreed to write off more than half of the debts owed to them by Athens.
According to estimates Greece owes French banks 41.4 bln euro, German banks 15.9 bln euro, UK banks 9.4 bln euro and US banks 6.2 bln euro.
Citi report also said Italy and Spain may  take a formal bailout from the European Union and IMF an addition to the banking aid Madrid has already asked for.


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