Bloomberg
June 6, 2012
Below are some frequently asked- questions on the future of Greece as it prepares for second elections on June 17 and confronts the possibility of exiting the euro.
How have markets reacted since the May 6 election:
Greece’s benchmark stock index has fallen about 27 percent since the election, compared with a 7 percent decline by the Stoxx Europe 600 Index. Speculation that a country will leave the euro-area have increased. Odds on a euro breakup by the end of this year rose to 39.4 percent as of June 1 from 22 percent on May 4, data compiled by Dublin-based Intrade show. The odds of that happening by the end of 2013 have risen to 57.6 percent.
What will happen immediately after the results are known?
The Greek constitution says that when a coalition can’t be formed, the president must broker a government of national unity, and if that can’t be done, new elections must be held. This is what happened after the May 6 election and the same pattern could repeat itself if there isn’t a clear result on June 17.
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