Greece is "about to dive into a Great Depression", according to emerging markets specialists at GLG Partners.
Karim Abdel-Motaal, managing director and co-manager of the company's emerging markets investment program, says the demise of Greece means "the Eurozone is now going to come face to face with what it means to have a common currency area, but different agents in it".
Greece came under fire from the European Commission last week in a report claiming the country had mis-stated its public finances.
In a bid to avert a debt crisis, its Government has drafted plans to cut its budget deficit to under 3% of GDP by 2012 - down from 12.7% in 2009.
But asset managers continue to view its fortunes dimly.
Jason Manolopoulos, manager at hedge fund Dromeus Capital, is shorting Greek credit.
He says: "In the short term, the rhetoric from the European Central Bank and Germany will lighten, in the hope Greece can get a bond issue [done] over the next eight weeks. But Greece's problems have not ended."
Ben Funnell, asset manager at GLG, adds a credible repair package is now needed to turn investors' views on the country's prospects.
He says: "Greece's feet are being held to the fire for them to get a package done, and until that happens the market will keep punishing them.
"The markets will force some reaction from the Greek government, which ultimately has to be an International Monetary Fund package that is very harsh.
"In the past, countries have had to have a 10% deficit reduction in place. Until you get a package we will see sovereign credit default swaps keep widening."
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