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Greeks to lose 55 pct income if country exits euro: bank survey

Greek citizens are expected to lose some 55 percent of their current income per capita and recession could surpass 22 percent, if Greece leaves the euro zone, according to a survey of the National Bank of Greece (NBG) released

Estimating the impact of such a case, the bank's experts painted a bleak image of the debt-laden country in a special report on the "critical dilemma."

They warned for unemployment rates that could reach 34 percent and for inflation of some 30 percent "due to the dramatic rise in the prices of imported products that would erase any benefits of devaluation."

After a two-year austerity drive to tackle the acute debt crisis that started in late 2009 threatening the country with a disorderly default, it is estimated that Greeks have already lost some 25 percent of their income on average.

Recession from 2009 to 2012 has reached a total of 14 percent, inflation stands at 2 percent and unemployment rates have soared to a record high of over 20 percent.

Amid a refuelled wave of scenarios internationally that despite painful efforts made so far, Greece could eventually go bankrupt and exit the European common currency zone. NBG analysts forecast a 65 percent devaluation of any new currency.

Greek officials, as well as European Union counterparts and International Monetary Fund lenders that support Athens with multi-billion euro bailout packages since May 2010 to avoid default, have repeatedly rejected the idea of a Greek euro exit that could rock the eurozone and the international financial system.

But, political uncertainty that added to Greece's financial problems after the May 6 inconclusive general elections and parties failure to form a coalition government, has increased fears over the country's economic future.

Greece heads to a second round of polls on June 17 and the latest opinion surveys indicate that Greek voters strongly reject austerity and are still divided between anti-bailout parties and pro-reform parties.

Local commentators and international analysts warn that political instability if parties fail to form a government again and a back track on the pledges made to creditors, could increase the risk of a chaotic bankruptcy and an exit from the euro.

                                                                                                Source: Agencies

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