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Greece could profit from Europe's political turmoil but it needs all the friends it can get: Economist

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Political uncertainty across Europe, such as Italian Prime Minister Matteo Renzi's resounding referendum defeat over constitutional reform, could push the European Central Bank (ECB) to start buying Greek debt as part of its trillion-euro bond-buying program, according to an economist.

Finance ministers from across the Eurozone met in Brussels on Monday and reached an agreement to provide some debt relief for Greece although, perhaps most notably, it was unclear whether or not the International Monetary Fund (IMF) would commit to a bailout program.

"In our view, the deal is not sufficient to bring Greek public debt on a sustainable footing but political uncertainty might mean the ECB is inclined to include Greek debt (after) a successful second review," Florian Baier, economist with Fathom Consulting told CNBC in a phone interview on Tuesday.

"The bigger picture though is the IMF, it is crucial for Greece. I mean, maintaining political support from Germany and Netherlands is so important with elections coming up next year in both countries."

The IMF was hesitant to sign up to the Greek bailout deal in 2015, saying it could only do so if this proved to be the final payment and there was some form of debt relief for the stricken country. Athens has received three bailout packages from the IMF, European Commission and European Central Bank in six years.

Long road ahead

"I think for Greece it is realistic that they should carry out reforms to make themselves competitive. It's about that, nothing more ... For Greece it is a long, hard road," Germany's Finance Minister Wolfgang Schaeuble told reporters ahead of the Euro group's meeting on Monday.

Rapidly decreasing levels of sympathy for Greece in Berlin could fall even further depending on the outcome of elections next September. Meanwhile, in the Netherlands, elections in March could oust Jeroen Dijsselbloem, the Dutch finance minister and a pivotal negotiator in Greek debt.

The ECB is set to meet on Thursday with President Mario Draghi poised to unveil an extension of asset purchases for the continent.

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