Greece’s election, in which the two main parties failed to win a combined majority, raised the risk that the nation will exit the euro and prompted calls for policies to boost European economic growth.
Greece now faces a 50 percent to 75 percent likelihood of leaving the euro in the next year to 18 months, Citigroup Inc. economists Guillaume Menuet and Juergen Michels wrote in a report today. They’d previously estimated the risk of a euro exit at 50 percent.
“The result is not uncomplicated, but I think the most important thing is that we give Greece the possibility to evaluate the results on its own,” Merkel told reporters in Berlin today.
European taxpayers are on the hook for a majority of Greek debt. After two bailouts since 2010, 73 percent of Greece’s 266 billion euros in debt is held by the European Central Bank, euro-area states and the International Monetary Fund, according to Greece’s debt office. In 2010, before the first rescue, Greece owed about 310 billion euros, all to the private sector.