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    A man walks past a European and Greek flags in central Athens, on Tuesday, June 30, 2015.

    Citigroup Forecasts Greek Eurozone Exit Despite Bailout Agreement

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    Citigroup believes Greece still faces a Eurozone exit despite the latest lifeline thrown to it by its creditors.

    MOSCOW (Sputnik) – The US multinational banking and financial service corporation Citigroup believes Greece still faces a Eurozone exit despite the latest lifeline thrown to it by its creditors, the Financial Times reported Friday.

    "Grexit [is] still our base case — The [bailout] programme implies a huge loss of sovereignty and has little chance of making Greece's position in the eurozone sustainable," the newspaper quotes Citi’s research note.

    Several Eurozone parliaments – German Bundestag key among them, as Greece’s largest creditor-nation – voted in favour of restarting negotiations on a third bailout package for Athens. The remaining few legislatures are expected to follow suit shortly.

    Days earlier, the Hellenic Republic’s legislature acceded to creditors-mandated austerity demands for the Eurozone votes to take place.

    Before talks resume, the European Union agreed to extend a short-term $7.78-billion bridge loan to be drawn from the European Financial Stabilization Mechanism by Monday to keep the Greek economy afloat.

    Meanwhile Citigroup said it doubts that the anticipated negotiations will include a $119-billion debt write-down, or haircut, needed to bring Greece’s debt-to-GDP ratio down to 120 percent by 2022 instead of the projected 170 percent.

    One of Greece’s three major creditors, the International Monetary Fund (IMF), assessed in a recent debt sustainability analysis that the $95-billion bailout package would be insufficient, advocating a 30-year grace period instead.

    "We suspect that the third bailout (like its predecessors) will suffer from inadequate implementation of supply-side reforms, insufficient debt restructuring and over-optimistic macroeconomic assumptions," the IMF comment reads, as quoted by the Financial Times.

    Greece faces its latest deadline next Wednesday, when it is due to repay $3.9 billion to the European Central Bank, one of Greece’s major creditors.

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