A Grexit delayed if not denied

 A Grexit delayed if not denied

We have held the view, since May 2012, that a Greek exit from the euro area (“Grexit”) in the next 12 to 18 months is a high-probability event (90%) which we assume, for the sake of argument, would happen on January 1 2013. We are now cutting the probability of Grexit over the next 12-18 months to 60% and judge that this event will probably happen later than we previously thought, most likely in 1H 2014.

It’s all about German politics, something we have gone over before and won’t do again now. ... But essentially, everything is pointing to a slower evolution of this crisis with both Spain and Greece edging towards decisions rather than careening.

Nobody wants to take the blame for Greece's exit. The Eurozone would like the Greeks to announce they are leaving, and the Greek political parties would like the Eurozone to either keep paying the bills, or push them out so that they don't have to take the internal blame.
The math is unforgiving- there is simply no way Greece can ever pay the debts as they stand today. This was obvious in 2010, and it is obvious today, but the politics of the entire matter force reality to the background.