Greek default on debt 'likely'

Global investors have little confidence in Europe's efforts to contain its debt crisis, with 73 per cent calling a default by Greece "likely".

Only 23 per cent say they expect the region's $1 trillion rescue package to both keep the European monetary union together and prevent a debt default by a government, in a quarterly poll of investors and analysts who are Bloomberg subscribers.

More than 40 per cent say Greece is likely to abandon the euro.

"There is clearly a risk of a break-up of the euro," says Geoff Marson, managing director at a Guernsey subsidiary of London-based Odey Asset Management.

European Central Bank President Jean-Claude Trichet, whose ECB supported the rescue package by buying bonds of Greece and other European governments, saw his approval rating tumble from a January Bloomberg poll.

Forty-eight per cent give the 67-year-old central banker an unfavourable rating in the latest poll, while 41 per cent view him favourably. In January, Trichet received a 60 per cent approval rating, with 27 per cent regarding him negatively.

"Trichet has sacrificed the ECB's independence by helping to rescue Greece," says Cyril Boudin, a participant in the poll and a derivatives trader at Unicredit Group in London.

Stock markets worldwide have slumped, and the euro has plunged as Europe has struggled to defuse its debt crisis.

The Stoxx Europe 600 Index has fallen 12 per cent from its 2010 high on April 15, while the euro has lost about 17 per cent against the dollar since the start of the year.

More than 60 per cent of those surveyed say they expect the euro to fall further against the dollar over the next three months.

European investors are more optimistic about the ability of their region to resolve its problems than were their counterparts elsewhere.

Thirty per cent of those polled in Europe say they expect the rescue package to succeed.

US investors are the most pessimistic, with only 14 per cent expecting Europe's efforts to work. A quarter of investors in Asia are also in that camp.

Overall, 40 per cent of investors worldwide say European defaults were possible even with the package, while another 35 per cent see some countries dropping out of the euro zone.

Investors in all three regions agree that Greece is the most likely country to default on its debt.

- BLOOMBERG