[WATCH] ‘70% chance that Greece leaves Eurozone’ – Sant

'70% chance that Greece leaves Eurozone' - Alfred Sant: Video: Ray Attard

Labour MEP and former Prime Minister Alfred Sant is staking his bets on a Greek exit of the Eurozone, saying that a Grexit is “70% likely to happen”.

“It is in the interests of both Greece and the Eurozone that the country remains part of the Eurozone,” Sant told MaltaToday after a launch of his new book ‘Malta u l-Ewro 2’.

“However, it will be extremely difficult for the two sides to agree on an economic solution as any potential decision will create huge political problems for European governments.”

Greece has less than two weeks to strike a deal or face defaulting on a massive €1.6 billion loan repayment to the International Monetary Fund. If it defaults, it risks having to leave the Eurozone and possible also the European Union.

The European Commission, the IMF and the European Central Bank are refusing to unlock €7.2 billion in bailout funds until Greece agrees to strict economic reforms in sectors such as pensions, VAT and the budget surplus.

However, leftist Greek Prime Minister Alexis Tsipras has refused to accept cuts to pension payments or public sector wages, arguing that two-thirds of Greek pensioners are already either below or near the poverty line.

“If Greece gets what it wants, it will create negative political consequences for the Spanish and Portuguese governments,” Sant said, referring to the recent rise of radical leftist parties in the two countries.

“It will also politically damage the German government to a certain extent,” he said, after Chancellor Angela Merkel appealed to German MPs to hold out on a possible deal with Greece.

“On the other hand, if Greece caves in to the Eurozone’s demands, then Tsipras’s Syriza party will find itself in great risk of splitting up. 40% of Syriza’s MPs are insisting that Greece doesn’t give in any ground from what Tsipras had promised in the run-up to the general election.”

However, Sant said that hope remains that Greece and its creditors will reach a last-minute solution.

“Over the years, Europe has proven successful at reaching diplomatic, political and economic solutions that, through mutual compromises, have kept the cart moving forward,” he said.

The European Central Bank is currently discussing whether it should pump more funds into Greek banks to prevent a banking crisis.