If Greece can form a government and that government signs up to the bailout agreement, then it is possible some of the targets in the program could be softened, the chairman of the euro zone finance ministers, Jean-Claude Juncker, said.
"I don't envisage, not even for one second, Greece leaving the euro area. This is nonsense; this is propaganda," Juncker, .... told reporters, dismissing those who threaten Greece with expulsion.
Junkers' made 3 independent, unique conjectures:
- Greece forming a Gov't ---- they can of course form a gov't... the question is only whether this occurs before or after new elections. Reality Check: Probabilities are > 90% that a new gov't cannot be formed before new elections.
- Gov't signing up for existing austerity agreements --- made by and before that gov't failed in the recent elections. If new elections occur (> 90% probability) as seems more and more likely by the hour, current polls show the anti-austerity progressive parties will prevail by a substantial margin. Given that the inhabitants just totally rejected the gov't that agreed to the austerity plan, then polls showing the anti-austerity parties will prevail by a substantial margin in new elections is a very high likelihood. Reality Check (> 90% probability).
- Not envisioning Greece leaving the EU --- technically Greece has no reason to leave the EU if its creditors are willing accomodate Greece's new gov't proposals to eventually make good on it's debts. So if the creditors (led & controlled by Germany's central bank) aren't willing to meet Greece's new gov't demands then Greece just simply doesn't agree to continue the implementation of the creditors demands and in fact rolls some of them back to some degree. In which case it's the creditors who have a choice to either continue to loan Greece funds it needs to make payments on terms of debt coming due or not continue to provide the funds. If funds are provided then Greece has effectively changed the creditors demands to align with their own proposals. If funds aren't provided then Greece will be unable to pay on the debts due and is then simply in default of its sovereign debt. If it can't receive funding to pay its debt then it also won't receive funding to carry it's current gov't expenditure level. In that case it will be Greece's option to exit the EUro and re-establish its own currency.... which they would do in order to revalue it to a level that increases Greek exports and induce capital inflows. Thus, Junkers either "envisions":
- Greece's new gov't (>90% probability of being anti-austerity) agreeing none-the-less to existing austerity measures or
- a military coup taking place to uphold the existing austerity measures and thus continue to obtain funds, or
- that Germany will decide to agree to the new gov'ts demands in debt relief to avoid the existing austerity terms imposed.
So let me give the probability of the anti-austerity parties forming a coalition that agrees to continue to implement existing austerity agreements (or substantially implement them). I'd put that probability at ~ 25%.
Finding the total probability of Greece remaining in the EU on the Euro is
10% probability of forming a gov't without a new election (i.e. 1 - 0.90)
10% probability of forming a gov't in favor of complying with existing austerity measures
25% probability that a new gov't opposing existing austerity measures will actually continue to implement them
0.25% probability that Greece will remain on the Euro and remain in the EU
That means there's something greater than a 99.75% probability of Greece exiting the Euro and EU ... without applying the probability of a military coup which replaces all the above. I'd guess all things considered that a military coup has a probability of < 10%... so it's still > 90% probability that Greece exits the Euro and EU.
What in fact does Junker's thinks he knows that nobody else knows yet? I'd guess he doesn't know anything more... hence has come up with the same rough probabilities of Greece remaining in the EU has I've estimated above. Therefore what he says in the article has nothing to do with reality... so is either just pure wishful thinking unsupported by an rational thought processing, or he's just using up print space by telling fairy-tales. This isn't unusual at all though.. .politicians dominantly just use up print and news space telling nothing but fairy-tales anyway. Nothing new and some things never change.