Standard & Poor's on Monday said it believes there is at least one-in-three chance of Greece exiting the Eurozone in the coming months, following this month's national elections.
Such a situation will be bought about by Greece rejecting the international bailout terms and and a consequent suspension of external financial support, S&P said in a report.
According to the rating agency, this would seriously damage Greece's economy and fiscal position in the medium term and most likely lead to another Greek sovereign default.
However, S&P said the likelihood of other euro members leaving Eurozone, in the wake of a Greek exit, is very remote.
"Greek exit by itself would not automatically trigger further downward sovereign rating actions elsewhere," the agency said.
The report observed that Greece's exit would likely strengthen the resolve of other countries receiving external support to pursue reforms and avoid the economic consequences of an exit.
S&P also said it expects the European Central Bank would respond vigorously to any sustained rise in borrowing costs for other sovereigns.
by RTT Staff Writer
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