The growing threat of a Greek exit from the euro-zone has cast a shadow over the outlook for European frontier markets. Admittedly, the reaction in financial markets has so far been muted. And the problems in Greece pose little threat to frontiers elsewhere in the world. Even so, fears are mounting that the Greek government will fail to reach an agreement with its creditors, possibly leading to a messy default and exit from the euro. Serbia and Bulgaria are the most vulnerable frontier markets to a “Grexit”, particularly if it leads to financial stress in the wider euro-zone.
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