by Simon Kennedy
July 5, 2015
Economists from JPMorgan Chase & Co. to Barclays Plc made a Greek departure from Europe’s monetary union their base scenario after the country’s electorate rejected the austerity needed to secure international assistance.
“Although the situation is fluid, at this point Greek exit from the euro appears more likely than not,” Malcolm Barr, an economist at JPMorgan in London, said in a report to clients on Sunday, adding it could come “under chaotic circumstances.”
Economists will be reexamining the odds on Greece’s membership of the euro after voters used a referendum to balk at proposals for more spending cuts and tax hikes from its creditors. Undermining their projections is the fact that many had predicted the Greeks would back the bailout pact.
“Exit now is the most likely scenario,” Barclays analysts said in a separate report. “Agreeing on a program with the current Greek government will be extremely difficult for euro-area leaders, given the Greek rejection of the last deal offered, and will be a difficult sell at home.”