The failure to reach a deal at last week’s Eurogroup meeting and the rapid outflow of deposits from Greek banks suggest that a near-term euro-zone exit may now be more likely than not. We do not buy the view that Greece would slip out of the euro-zone without a ripple. Should it become clear that a major default and exit are indeed coming soon, we will pull down our projections for growth across the rest of the euro-zone this year and next, possibly to predict a renewed recession.
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