sentix EBR Index shows quick Euro end for Greece

Written by Patrick Hussy | 30 July 2012
Posted in sentix Euro Break-up Index News

The sentix Euro Break-up Index for July rises by 22 percentage points to 73 %. The corresponding survey was conducted by sentix from July 26 to July 28 among 811 institutional and individual investors. The index mirrors the investors' perceived probability of at least one country leaving the Euro within the next twelve month.

One month ago, when the survey took place immediately after the public had been informed about the results of the last EU summit, the sentix EBR Index stood at 55 %. It seems noteworthy that such a steep increase of the indicator occurs now in July, just when ECB-President Draghi rather aggressively tries to convince investors that everything will be done to the rescue of the common currency.

The main reason for the survey participants being so skeptical is Greece. Until the weekend it remained unclear if the Hellenic government will manage to successfully implement the budget cuts demanded by the so-called Troika. As further refinancing of the country depends on achieving this goal, 97 % of the respondents now expect Greece to quit the Euro not later than in a year. In June it was 94.5 %. As last month, investors still expect Cyprus to abandon the currency with the second highest probability. At the same time, the index for the Mediterranean island decreases from 25.4 % to 23.5 %.

Another, much more important country has instead come into focus this month. Because of the problems of its banks and regions Spain's index has risen from 12.5 % to 15.4 %. The southern monarchy is thus perceived as the third most likely country leaving the Euro. Portugal is now only number four as its index recedes from 13.4 % to 12.2 %.

The survey also allows for the calculation of a contagion index reflecting the danger of a spreading of the break-up virus to other countries within the Euro zone. The respective index rises slightly in July from 44.1 % to 45.3 %.

The sentix Euro Break-up Index is published on a monthly basis since June 2012. The corresponding survey is conducted by sentix at the end of the fourth week of each month. Results are published on the following Monday. Survey participants may name up to three countries which they expect to exit the Euro within the next twelve months. Further details and the current index values can be found und http://ebr.sentix.de