A Greek sovereign debt default appears to be increasingly likely, at least according to the financial community.
In a Bloomberg poll of 1,263 investors, analysts, and traders, 85% of respondents said they see Greece being unable to pay off its debts. This level is up from 74% in January of this year, and from 73% in June 2010.
As for predictions on other members of the PIIGS, 59% of poll members predicted Portugal will default, up from 49% in January 2011 and from 33% in June 2010. Concerning Ireland, 55% of respondents see it defaulting, compared to 53% in January and from just 17% last June. Investors were substantially more optimistic on Spain, as just 25% see a likely default there.
James Shugg, a senior economist at Westpac Banking Corp. in London who responded to the poll, commented that “Ireland, Portugal and Greece will probably all need to restructure. They are continually going to need more and more bailout funds, and at some point the decision will be made to draw the line and get creditors to participate.”
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