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Greek crisis: French PM Manuel Valls determined to keep country in euro – but economists say Grexit is now more likely than ever

In a poll by Reuters, economists put the likelihood of Greece leaving the Euro at 55 per cent

Thursday 09 July 2015 07:20 BST

Valls said that the 'destiny of Europe is at stake' over the coming days (ETIENNE LAURENT/EPA)

Manuel Valls, the French Prime Minister, has said that it is vital to keep Greece in the eurozone - but leading economists believe that an exit is more likely than ever before.

Speaking to MPs, Valls said: "Keeping Greece in the euro and therefore in the heart of Europe and the EU is something of the utmost geostrategic and geopolitical importance."

"Allowing Greece to exit the eurozone would be an admission of impotence - France refuses that."

He went on to claim that a deal between the Greek government and its creditors was "within grasp" - but his comments seem to go against the opinions of leading economists.

When polled by Reuters, 57 economists gave a median 55 per cent chance of Greece leaving the eurozone.

In pictures: Greek referendum

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People celebrate in Athens after the first exit-polls of the Greek referendum

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A "No" supporter flashes a victory sign before a Greek flag atop the parliament in Athens, Greece July 5, 2015.Greeks voted overwhelmingly "No" on Sunday in a historic bailout referendum, partial results showed, defying warnings from across Europe that rejecting new austerity terms for fresh financial aid would set their country on a path out of the euro.

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Supporters of the No vote react after the first results of the referendum at Syntagma square in Athens

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Supporters of the No vote wave Greek flags after the referendum's exit polls at Syntagma square in Athens

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Greece's finance minister Yanis Varoufakis casts his vote in the country's referendum

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A ballot box is emptied by a voting official at the closing of polling stations in Athens, Greece July 5, 2015. Greece voted on Sunday on whether to accept more austerity in exchange for international aid, in a high-stakes referendum likely to determine whether it leaves the euro-currency area after seven years of economic pain.

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A photographer photographs a man waiting to vote in the referendum at a school in the suburbs of Athens

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Greek voters are being asked to choose between backing their creditor's austerity measures or rejecting them

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Tourists walk past posters with slogans that read “OXI“ (NO) and “NAI“ (YES) ahead of the referendum in Athens

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Opposition parties to Syriza, including the centre-right New Democracy, are campaigning for a ‘Yes’ vote in the referendum

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Protesters on both sides of the argument ('No' pictured here) have rallied in Athens

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Greek Prime Minister Alexis Tsipras has been branded reckless and a feckless liar by EU leaders

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According to polls which surveyed some 1000 people across the country, 41.5 percent of Greeks would support the new bailout measures to avoid an exit from the Eurozone

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Despite Tsipras's assurances, many Greek people are not certain whether Sunday’s referendum is a vote on whether Greece will remain in the euro or not

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The Greek and EU flags flutter in front of the ancient Acropolis hill in Athens. The Greek people have been called upon to show “calm and national unity”

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Greek Prime Minister Alexis Tsipras addresses a crowd of 25,000 'No' supporters in Athens' Syntagma Square

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Greece’s Prime Minister Alexis Tsipras gave a televised address to the nation ahead of the vote. He has called on voters to reject creditors’ proposals for more austerity in return for rescue loans

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Protesters march holding a torn European Union flag during a demonstration for the 'NO' campaign in Thessaloniki

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Greek Finance minister Yanis Varoufakis has pledged to resign if his country votes “yes” to the bailout plan

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Pensioner wait to get their pensions outside a National Bank of Greece branch in central Athens. Banks only opened for pensioners to allow them to get their pensions, with a limit of 120 euros.

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Protesters attend an anti-austerity pro-government rally in front of the parliament building

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The possibility of Greece leaving the Eurozone is increasing by the day. Merchandise already exists to accompany the event

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An elderly man waits to receive his pension outside the closed National Bank of Greece headquarters in Athens

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People stand in a queue to use an ATM outside a closed bank in Athens

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A banner supporting the NO vote in the upcoming referendum hangs from the offices of the Greek Finance Ministry

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Greeks will be asked whether they accept the austerity terms demanded by the country's creditors

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Eurozone finance ministers expressed disappointment at the Greek decision to hold a referendum on the bailout terms

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Alexis Tsipras, the Greek Prime Minister, said bailout conditions had ‘asphyxiated’ his country

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This is the first time it has appeared that Greece is more likely than not to leave the eurozone in the eyes of economists in years of Reuters polls that have asked the same question.

Last week, the figure was on 45 per cent, suggesting the outlook may have worsened after Sunday's referendum, in which the Greek people voted 'No' to their creditor's demands of repayments and government spending cuts.

For much of the Greece crisis, France has emerged as an ally. Yesterday, Valls said that the "basis for a deal exists" between the nation and the rest of Europe.

Greece, despite yesterday submitting no new proposals for repayment ahead of a Brussels eurozone meeting, has sent a request for a third bailout package to its creditors.

The plan has been passed on to the European Commission and the European Central Bank (ECB), who will assess the proposal in terms of what risks it poses to the eurozone and whether it properly meets Greece's needs.

Valls said that the coming days will be crucial for Greece and the rest of the continent, saying: "The destiny of Europe is at stake."

If Greece fails to convince its creditors of a deal by Sunday, it will move one step closer to losing its membership of the euro. Sunday marks the deadline for the ECB bond payment of €3.5 billion euros.

Like the last deadline that saw Greece default on its IMF loan, Greece simply doesn't have the money to pay this back. Without a bailout, Greece will default, and the emergency money currently being provided by the ECB to ensure liquidity will stop.

This would mean a shortage of money, and would likely force Athens to start printing its own money - effectively meaning it will have left the eurozone.

As Greece becomes closer to a euro exit than ever before, Manuel Valls will be hoping that the next few days of talks will succeed.

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