Forex Flash: “Grexit” likely by the end of 2012, chances of 90% - Citi (Barcelona) - Willem Buiter, chief economist at Citi that coined the term “Grexit” used all over by the media, believes Greece is likely to leave the Eurozone over the next 12-18 months, with chances of 90%: “Our base case (for the euro zone) is for prolonged economic weakness and financial market strains in periphery countries, spilling over into renewed recession for the euro area as a whole this year and the next”, stating the increased chances from 50-75% now to 90%, most likely in the next 2-3 quarters.

The crisis won’t be solved after the “Grexit” as Spain and Italy are expected to “form of troika bailout for the sovereign by the end of 2012”, and Portugal and Ireland (“perhaps Italy, Spain and Cyprus”) will proceed in bank restructuring with “only limited fiscal burden-sharing”, Buiter said.

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