Goldman Sachs's Chief European Economist Huw Pill warned in a Monday note that breaking the deadlock in the Greek debt negotiations remained "very challenging," and could trigger new elections or a default. "Not only is it possible that we may need to see sovereign technical default and/or blocked Greek bank deposits in order to come to an accommodation between Greece and its official creditors, it may be necessary to do so in order to break the current impasse in negotiations," Pill said in the note. The comments come as Greece is facing another test this week, with 300 million euros ($327 million) due to be paid to the International Monetary Fund on Friday. Investors worry Athens will miss the payment unless the antiausterity government reaches a deal with its creditors and receives the next block of bailout cash. Pill said that Goldman still expects the two sides to ultimately hammer out an agreement. "At the same time, the probability of a Greek exit is clearly not zero (and indeed has probably risen of late)," he said in the note.
Copyright © 2015 MarketWatch, Inc.
Continue Reading Below