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.
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.