Greece is completely bankrupt: Rabo Bank

In an interview to CNBC-TV18, Jan Lambregts of Rabo Bank said, he would not take any temporarily relief in the equity markets as being a permanent state of affairs.

According to him, Greece is completely bankrupt. Below is the edited transcript of his interview. Also watch the accompanying video. Q: There is a big contradiction going on right now. On the one hand, the IMF has said it has cuts its growth forecast for Europe. It said that a recession in 2012 cannot be ruled out. On the other hand, yesterday we saw great optimism in the market. Which of these is the real indicator of what is going on in Europe? A: There are some big issues playing out at the moment. The IMF ofcourse is trying to deal with European banking system and recapitalisation thereof. It might have to create SPV for that. There is nothing definitive. In the Euro zone, there is bank stress test again. This time it will be really stress test with significant stress coming from write down peripheral debt. So, I think we are still in the middle of things. We see big risk on the soft trades. I would not take any temporarily relief in the equity markets as being a permanent state of affairs. Q: Does this mean that perhaps a Greek default and a contagion effect is still very much a reality? A: No. Will Greece go ultimately bankrupt and default on debt? The answer is yes. If you look at primary budget surplus they need to run this year, next year just to keep debt stable at 2010 levels, they would need a primary surplus of 6% and 3.5% in 2012. They cannot even run a surplus. Greece is everything it