GREEK EXIT SCENARIOS GAINING TRACTION

Chairman Jean-Claude Juncker suggested Greece be given more time to implement budget cuts and other ways to raise revenue at a meeting with Eurogroup, the association of European Union finance ministers. And Samaras is in no way exaggerating as Greek paper Thema reported that since the beginning of the year 1,250 businesses in Theesaloniki, the country's second-largest city, have shut down. It was only March that the country defaulted on 75 percent of its debt outstanding to the private sectors - banks and insurance companies as well as individual investors - whereas official holdings of Greek debt - mostly at the European Central Bank, the International Monetary Fund, as well as the European Financial Stability Mechanism - retained full value. During the course of the debt restructuring, th above-named institutionals agreed on a timeline for Greece to return back to financial stability and solvency. German Chancellor Angela Merkel did not give any concessions and affirmed that she expects Greece to deliver on its promises, but also said that she wants Greece to stay part of the Eurozone. Meanwhile Merkel is struggling with more and more calls that a Greek "exit" could be manageable. While these words can be considered prudent behavior, there are other German politicans that belong to Merkel's fraction that are openly calling for throwing Greece out of the Eurozone. The general secretary of the coalition party, Alexander Dobrindt, issued provocative warnings in an interview with German weekly Bild am Sonntag when talking about ECB bond purchases. He critized Mario Draghi, ECB's president for abusing the ECB for "Italian interest". He added vehemently against unconditionally helping "debt addicts." Merkel fears a domino effect and her desire to keep Greece in the Eurozone is equally as likely as a Greece exit. A report by investment bank Citigroup said, "While the ECB's decisions may help limite the economic and financial market spillovers of "Grexit' the likelihhood of "Grexit" itself is coming into even sharper focus. There appears to be a sizeable and probably unbridgeable gap between the Greek government's ability to quickly cut the fiscal deficit and implement major supply-side reforms and privatizations and the measures that creditor nations would require to extend further funding." The critical deadline will be late September or early October when the next report on Greece's progress will be released. If Greece will miss the set targets, again, it will be hard for the creditor nations to justify keeping them in the Eurozone. In the eventuality of a Greed exit, a dominio effect cannot be ruled out according to a report by think-tank VOX. If one country departs from the Eurozone,the current slow bank run from the south will accelerate quickly and become the most massive bank run on most bank in Southern Europe and the banking system may be compromised. There have been three historical examples of failed currency unions in Europe - the Hapsburg Empire, the Soviet Union and Yugoslavia - that all led to a dissolution once the first member defected.