Grexit or Bankruptcy for Greece within the Next 4 Years, FT says

A shocking prediction was made by The Financial Times concerning Greece while evaluating the sustainability plan of the German government resulting from the coalition between Angela Merkel with the Social Democrats. The newspaper wrote that within the next four years, Greece will either return to the drachma or declare bankruptcy, or maybe both scenarios will take place.

“Germany’s coalition will have to break promises” this is the title of the article The Financial Times published. It naturally talks about that the leaders of the ruling coalition would not push through with their promises to the German voters for the reason that there is “a lack of preparation by the political class for what will hit it in the next four years. The big threat to Germany over the next four years is not demography but the unfolding eurozone debt crisis. No matter which crisis resolution scenario prevails, some promises made to the electorate are going to be broken.”

The Financial Times article provided a key paradigm of what will happen in the next four years of the Greek debt crisis and with the emphasis that: The Organization for Economic Co-operation and Development is forecasting that the Greek sovereign debt ratio will stabilize at 160 per cent of gross domestic product in 2020. The EU and the International Monetary Fund have been basing their whole bailout arithmetic on a goal of 124 per cent. Greece will either default or exit the euro – or both in the next four years. The EU’s “pretend-and-extend” strategy of revolving loans at longer maturities and lower interest rates is approaching a natural limit.”