By Ben DuBose
On-site interview with Dr. Jan Randolph of IHS
MILAN, Italy -- A challenging environment for European
refiners and petrochemical producers could be
further threatened by an impending exit from a nation such as
Greece, a director with global consultancy IHS Global Insight
said on Thursday.
Jan Randolph, director of sovereign risk at IHS, said the
likelihood of a fringe breakaway of one country -
namely, Greece - from the European Union (EU) was 20% within
one year and 40% within five years.
Those figures are up sharply from earlier figures of just 5%
and 20%, respectively, in November 2011.
In the worst-case scenario, pressures inside and
outside government and country will mount, said Dr.
Randolph, who delivered the keynote address on Thursday at IRPC
2012 in Milan.
An inability or unwillingness to meet bailout terms
severs sovereign sector financing, he said. It could also
be triggered by a failure to agree to a second bailout,
imposing more austerity or hard default with new
Greece would essentially weigh up opportunity costs
and benefits of staying in or leaving, and in this scenario, it
tilts to the latter.
Several significant European refining players have expressed
concern at IRPC over the regions economy, noting that
technological innovations must lead the way for the sector
since economic and debt concerns are limiting traditional
Dr. Randolph said a larger breakup of the EU was unlikely to
occur, giving it only a 2% chance within the year and 3% within
On the whole, he described the future of the current union
as a coin flip. Over the next five years, Dr.
Randolph gives the EU a 52% chance of staying intact, with
Greece the largest risk.
Southern Europe is clearly in recession, he
said. The question is how deep it will go.
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