BUSINESS

Rating agency DBRS sees ‘moderate risk’ of Grexit

TAGS: Economy

Rating agency DBRS said it believes Greece runs a “moderate” risk of exiting the eurozone.

In a report issued late on Monday, DBRS warned that while the other 18 states that share the euro currency run a “low risk” of eurozone exit, including all other countries to emerge from a bailout program, Greece continues to face a moderate possibility.

“The main factor setting Greece apart from other countries is the high stock of official external debt, which Greece will need to gradually repay via primary surpluses,” the report noted.

“Despite the favorable terms on Greece’s official debt, DBRS considers that this debt burden could again become a source of tension between Greece and its main creditors. If Greece is unable to sustain its primary surplus commitments, its creditors may be less willing to contemplate additional debt relief,” argued DBRS.

The agency warned, “If simultaneously faced with persistently weak growth, a future government could conclude that Greece has exhausted other options and the cost of remaining inside the currency area is too high.”

[Xinhua]

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