Investors see eurozone immune to Greek upheaval

Greece’s future in the eurozone may hang in the balance once more, but investors believe the market fallout from any current political turbulence can be insulated, unlike during the region’s sovereign debt crisis of 2012.

Investors are betting that a rout in Greek markets, sparked by the latest political upheaval in Athens, will not spread, placing their faith in firewalls built following the eurozone debt crisis.

In fact, an HSBC list of the 10 biggest market risks for 2015 does not even mention Greece, even though if the Greek Parliament fails to elect a new president by the end of the year, parliamentary elections would be triggered in which anti-bailout party SYRIZA would be favorite.

Of course, whether the market can remain so sanguine will depend on external factors, including the financial turmoil in Russia. So far, however, any prospect of a Greek default and exit from the eurozone has been greeted with relative calm in other peripheral eurozone economies, such as Italy and Spain.

“The market believes that the rest of the eurozone can isolate the Greek problems and survive,” Christian Schulz, an economist at Berenberg, said.