One-In-Three Chance of Greece Leaving EU

Greek radical leftist leader Alexis Tsipras gestures during a presentation of his party’s election platform in Athens, June 1. Tsipras vowed to renegotiate the country’s bailout deal from scratch if his Syriza party wins crucial June 17 elections in Greece. (LOUISA GOULIAMAKI/AFP/GettyImages)
One-In-Three Chance of Greece Leaving EU
Greek radical leftist leader Alexis Tsipras gestures during a presentation of his party's election platform in Athens, June 1. Tsipras vowed to renegotiate the country's bailout deal from scratch if his Syriza party wins crucial June 17 elections in Greece. (Louisa Gouliamaki/AFP/GettyImages)
6/4/2012
Updated:
10/1/2015
<a><img class="size-large wp-image-1786651" title="Greek radical leftist leader Alexis Tsip" src="https://www.theepochtimes.com/assets/uploads/2015/09/145524042.jpg" alt="Greek radical leftist leader Alexis Tsipras gestures during a presentation of his party's election platform in Athens, June 1. Tsipras vowed to renegotiate the country's bailout deal from scratch if his Syriza party wins crucial June 17 elections in Greece. (LOUISA GOULIAMAKI/AFP/GettyImages)" width="590" height="392"/></a>
Greek radical leftist leader Alexis Tsipras gestures during a presentation of his party's election platform in Athens, June 1. Tsipras vowed to renegotiate the country's bailout deal from scratch if his Syriza party wins crucial June 17 elections in Greece. (LOUISA GOULIAMAKI/AFP/GettyImages)

NEW YORK—There is a one-in-three chance of Greece leaving the eurozone and ditching the euro currency, credit ratings firm Standard & Poor’s (S&P) said in a report Monday.

“This could be brought about by Greece rejecting the reforms demanded by the troika—the European Commission, International Monetary Fund (IMF), and European Central Bank (ECB)—and a consequent suspension of external financial support.”

The European debt crisis has entered into its third year and has forced Greece, Ireland, and Portugal to resort to bailouts. Analysts also expect that Spain will require a bailout in the near future considering the state of its banking industry and soaring unemployment.

Recently, there has been considerable speculation whether Greece would abandon the euro currency—and the stringent austerity measures it must agree to enforce—and move on.

Most analysts believe that the upcoming elections, to be held on June 17, will bring into power politicians opposed to remaining in the eurozone and taking further bailouts. However, it is still unclear what ramifications a Greek euro exit would pose on the region’s political and economic landscape, as well as the financial markets at large.

S&P expects the Greek economy to suffer as a result, if the nation decides to exit the eurozone. “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 in the report.

It also said that the move would be an isolated incident and would prevent other nations from exiting the current 17-nation bloc, after witnessing the harsh economic and fiscal consequences it would have had on Greece.

Emergency Talks

The Group of Seven (G-7) finance ministers agreed to hold emergency talks Tuesday to discuss the euro crisis, specifically focusing on the future of Spain.

G-7 ministers feel that there are certain risks posed by the current Spanish banking crisis and the upcoming June 17 Greek elections, which could herald turmoil for the global financial markets.

“All the instruments are available to guarantee the safety of banks in the eurozone,” German Chancellor Angela Merkel and leaders of her center-right coalition said in a statement Monday.

The European Central Bank (ECB) also plans to meet on Wednesday, and an interest rate cut cannot be ruled out given the current environment.

As of last week, there are already isolated cases of bank runs in Spain and Greece.