6 Jul 2015
Greek post-referendum scenarios - Deutsche Bank
FXStreet (Bali) - In Deutsche Bank view, Grexit and a new deal for Greece under a new government are the most likely scenarios going forward, with about equal probabilities, while a softer deal the most unlikely.
Key Quotes
"N1 - Soft deal: The most unlikely scenario is that the euro-area partners offer a much softer programme to Greece."
"N2 - Default-and-stay: Moderately less unlikely is a scenario where Greece defaults but stays in the euro thanks to a direct recapitalisation of Greek banks by the euro-area partners, with the Greek government using only domestic resources for the country’s fiscal needs."
"N3 - New deal: The third scenario is one in which the rising economic and political cost of a closed banking system results in the Syriza government being replaced by a new government of national unity and a new deal with creditors being reached."
"N4 - Grexit: In our view, Grexit and Scenario N3 are the most likely – with about equal probabilities. That said, we see the probability of Grexit increasing the larger is the margin of victory of the NO vote. Even with a NO vote, the cumulative probability of the first three scenarios still exceeds that of Grexit."
Key Quotes
"N1 - Soft deal: The most unlikely scenario is that the euro-area partners offer a much softer programme to Greece."
"N2 - Default-and-stay: Moderately less unlikely is a scenario where Greece defaults but stays in the euro thanks to a direct recapitalisation of Greek banks by the euro-area partners, with the Greek government using only domestic resources for the country’s fiscal needs."
"N3 - New deal: The third scenario is one in which the rising economic and political cost of a closed banking system results in the Syriza government being replaced by a new government of national unity and a new deal with creditors being reached."
"N4 - Grexit: In our view, Grexit and Scenario N3 are the most likely – with about equal probabilities. That said, we see the probability of Grexit increasing the larger is the margin of victory of the NO vote. Even with a NO vote, the cumulative probability of the first three scenarios still exceeds that of Grexit."