At a time when Athens is still involved in debt restructuring negotiations with its private creditors, Neelie Kroes’ recent allusions to a Greek exit from the euro are a sign that European leaders are intent on preparing the terrain for such an eventuality.

But the fact the damage would be lighter makes such a Grexit more likely. And with Greece currently struggling to secure reform pledges from its public sector and its wider population, the willingness of overseas creditors to help has diminished somewhat.

In this piece, we make two key points: First, we raise our estimate of the likelihood of Greek exit from the eurozone (or ‘Grexit’) to 50% over the next 18 months from earlier estimates of ours which put it at 25-30%.