Even after the referendum results, the Eurasia Group - the leading global political risk research and consulting firm - predicts that a "Grexit," a widely-used term coined from combining the words "Greece" and "exit," and referring to Greece to leave eurozone, is still unlikely. "If Greece does indeed leave the euro over the next few days [or] weeks, euro creditors, but especially Germany, will be held responsible. But German Chancellor Angela Merkel has always wanted to avoid any blame for this eventuality. From Germany's perspective, it is absolutely crucial that Greece's exit happens clearly as a result of the Greek government's actions. This is unlikely to be the case under current circumstances," the group stressed in a report.
According to the report, the problem for Merkel is that the Greek government's referendum was not on eurozone membership per se. As a result, the Greek government is vociferously claiming it wants to reopen negotiations and cut a deal that allows it to remain a eurozone member. Combined with a strong majority of the Greek population that continues to support eurozone membership, it will be hard for Merkel to avoid being held responsible for a "Grexit" if it were to occur. This is a problem for Merkel, and will weigh heavily on her political future as the one responsible for the breakup of the eurozone.
The report also underscored that there was a softening tone in Greek Prime Minister Alexis Tsipras' speech after the referendum, as he highlighted the resignation of the outspoken Finance Minister Yanis Varoufakis and asserted that these developments suggest that Tsipras is fully aware of the mandate he has been given by the Greek people: Not one of rupture with Europe but rather to conclude a deal that is better than the previous one that was offered. "In our view, any meaningful concession on debt relief will be enough for Tsipras to sell this package as different than the deal that was on the table before. While this will still be difficult for CDU/CSU [Union Party] members in Germany's Bundestag, there is probably already some recognition that debt relief is unavoidable. Indeed, the [International Monetary Fund] IMF's intervention last week makes this abundantly clear. The junior coalition partner SPD [Social Democratic Party of Germany] is also likely to start defending such a move more openly, since they have always been more open to it," the Eurasia Group predicted.
