Με αφορμή τις δηλώσεις του ΓΑΠ και άλλων στελεχών του ΠΑΣΟΚ που αναφέρονται στην "δεινή θέση που βρισκόμαστε τώρα και στο ελληνικό θαύμα για το οποίο θα μιλάνε όλοι σε τρία χρόνια", εξασφάλισα την ανάλυση-πρόβλεψη της εταιρείας "exclusive-analysis" σχετικά με τα πιθανά σενάρια για την Ελλάδα τα ερχόμενα χρόνια, η οποία βασίζεται σε ορθολογικά κριτήρια και είναι απογυμνωμένη από συναισθηματισμούς και ιδεολογήματα. Ας ελπίσουμε το σενάρια τους να διαψευσθούν:
Special Report for Rafael Gomes
Friday, 07 May 2010
" Outlook for Greece and the Eurozone
Many potential scenarios could develop. These begin with effective European management of 'the Greece problem' and containment to just the one country. They end with the Armageddon scenario in which the European Central Bank (ECB) fails to reassure markets that financial institutions in peripheral Europe are acceptable credit risks. This would see banks in 'troubled' nations (Greece and beyond) completely lose their access to wholesale funding. Liquidity would dry up rapidly with companies unable to pay workers, people unable to use cash points or their credit cards etc. Mass civil unrest would surely ensue.
Faced with such a scenario the ECB would be forced to go into full scale quantitative easing mode, buying up bonds aggressively across southern Europe and providing emergency funding to distressed financial institutions. This would of course be enormously negative for the value of the euro. It would also be a bitter pill for Germans to swallow given the history of the Bundesbank and the Deutsche Mark.
In essence though it seems to us that the following scenarios are at least worth considering:
1. Greece defaults and leaves the euro in the next 3 years; contagion effects are limited.
Greek GDP is forecast to contract by 4% in 2010. The budget deficit for 2009 is likely to have exceeded 13% and public debt is forecast to increase to nearly 150% in 2013. Furthermore, the IMF is forecasting that Greece will only in 2017 be able to return to its 2008 GDP figures. And all of the above is probably too optimistic.
Eurozone and IMF support buys Greece two or three years without it needing to attract private investment. With the economy severely contracting, however, budget deficit problems remain acute despite the fiscal tightening. Domestic opposition to an extremely painful fiscal tightening is intense and gradually weakens political resolve. It becomes obvious that Greece will be unable to service an outstanding debt of 140-150% of GDP. The country follows an 'Argentina solution', announcing a debt restructuring and its withdrawal from the euro as the only credible path towards economic recovery. In the meantime, other nations have taken appropriate fiscal steps to reassure investors that their debt burdens are manageable, and that their position within the euro is not seriously threatened.
Likelihood
Probably our central scenario, despite its unprecedented nature and the ugly implications it carries. It's desperately hard to see how Greece can turn around such a dire fiscal starting point. The country is locked inside the euro when everything screams for a competitive devaluation. The people are being asked to endure a brutally tight fiscal policy and they don't feel to blame for the situation they are in. Every few weeks the demands on them get more onerous and there's no realistic end in sight. And the fiscal assumptions are probably still far too optimistic given the level or disorder, disruption from national strikes and damage to the tourism industry.
Implications
- The Greek government does not have recourse to international debt markets for a prolonged period.
- Greek businesses, unable to service euro denominated debts, suffer widespread insolvencies. These hurt corporate balance sheets outside Greece, most notably those of French and German banks.
- With a competitive currency, tourism receipts and export earnings lead an economic recovery in Greece. A looser fiscal policy helps growth that debt servicing costs have decreased.
2. Greece and other euro-zone members muddle through.
ECB loans to Greece and pledges of support to other states gradually calm markets. Greece implements a sharp fiscal tightening and starts to reduce its budget deficit, helped by a more competitive euro and stronger growth outside the EU. Spain, Portugal, Ireland and Italy take their warning from Greece and all pursue quite restrictive fiscal policies. Hedge funds with short positions begin to close them out, taking their profits and allowing European government bond spreads fall to more normal levels.
Likelihood
As discussed, we are highly sceptical about Greece's ability to emerge for its current problems without a sovereign default, or indeed exit from the single currency. We do though feel that other nations are much better placed. With sensible economic policies, which we expect to be implemented, debt levels should remain manageable and private capital accessible.
Implications
- The psyche of 'invulnerability of the euro project' within the eurozone has been seriously shaken. Over the next 3-5 years, eurozone states, led by Germany, will need to give very serious attention to the viability of a single currency zone in the absence of a more coordinated fiscal policy. There will be calls to establish a supranational EU body with powers to oversee fiscal policy in members more directly. This opens up a host of additional issues around enforcement, not to mention opposition to interference from Brussels.
- The EU needs to improve its crisis management response given its woeful showing this time around. One idea is to open emergency credit lines between governments.
3. Greece is forced to default on its debt but averts devaluation.
The Greek government realises that even with an enormous fiscal contraction it still can't credibly service its outstanding debt. When financial markets have stabilised and the risk of contagion reduced, the Greek government announces a debt restructuring, with lots of supportive noises from fellow euro members and the ECB. The timing would be designed to follow some positive news, e.g. stronger US growth, an improving EU export performance, or a good quarter of banking sector profits.
Likelihood
We assess that Greek debt default is very likely. On the currency front, an 18% depreciation of the euro against the dollar since December 2009 should help net exports, but this is mitigated by the fact that almost half of exports go to eurozone members. In addition, post default, a reduced debt burden should enable Greek fiscal policy to be more neutral, helping a possible Greek recovery. On balance though, we feel the structural challenges Greece needs to confront to be inside the euro are too great. We expect it to leave the euro on a 3-5 year view.
Implications
- Clearly a sovereign default sets a dangerous precedent inside the euro, especially if it occurs when risk aversion is still acute. Greek banks would need substantial support from the ECB to ensure adequate domestic liquidity.
- How would the Greek government continue to fund its budget deficit - indefinite loans from the ECB?
4. Greek default and devaluation; break-up of the euro.
As discussed in scenario 1 for default and devaluation. However, in this scenario, other 'troubled' European governments fail to act soon enough or decisively enough to reassure financial markets. Taxpayers in northern Europe decide they have had enough of bailouts and the euro zone gradually fragments over the next 5-10 years, leaving a strong northern Europe group of members.
Likelihood
This scenario is unlikely given that other members will almost certainly take Greece as a wake-up call. Ireland has already implemented considerable fiscal discipline after many years of highly leveraged property market excess. Portugal has also shown reasonable discipline after the boom it enjoyed as interest rates converged to euro levels in the mid-late 1990s. Spain's outstanding debt is only just over 50% of GDP, though its budget deficit and property markets are real reasons to worry. There is little doubt the eurozone will deploy all available means to avoid the costs associated with national defaults and exits from the euro.
Implications
- A huge debt overhang should a Greek exit from the euro open the door to others. Enormous strain on the global financial system once again.
- A series of 1930s style competitive devaluations amidst a horrible growth outlook.
- Other nations contemplating currency union (e.g. the Gulf Cooperation Council) quickly reconsider.
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