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26 Jan 2015
A consensual outcome between Greek and its creditors achievable – DB
FXStreet (Barcelona) - According to Deutsche Bank, a consensual outcome between Greek and its creditors is achievable but only with meaningful concessions from both sides, and further add that chances for a unstable Greek government and fresh elections exist.
Key Quotes
“The situation in Greece is undoubtedly delicate with the nation’s banks having already requested liquidity assistance from the ECB due to deposit outflows and the Greek government's continuing need to issue debt. Ultimately the outcome here is going to depend on how negotiations between Syriza and the Troika go, with Syriza’s desire to achieve meaningful debt relief for Greece along with a reduction in austerity and changes to the country’s structural reforms all on Syriza’s policy platform. It is likely that the twists and turns of these negotiations will form the main narrative for Greek risk in the coming weeks.”
“George sees a consensual outcome between the Greek government and its creditors as achievable but requiring very meaningful concessions from both sides and the chance of Greek government instability and fresh elections a possibility.”
“Looking slightly more widely, last night’s result marks a major political event for Europe and possibly a new era for European politics. It marks the first time that a non-mainstream party has won the reins of government in the aftermath of the crisis and may be a harbringer for more political turmoil to come for the region as non-mainstream parties grow ever closer to power. Syriza are the first to form a government.”
“Our plate spinning analogy for 2015 suggested that the central banks would keep the plates spinning aggressively until a cure for gravity (sustainable growth) or a policy error or a political accident.”
“With the ECB now being aggressive, the fall-out from yesterday's vote is likely to be limited unless no compromise can be made. However political risk is going to be the biggest challenge to the Euro over the years ahead. It might only take one rogue election result to seriously damage the whole project.”
Key Quotes
“The situation in Greece is undoubtedly delicate with the nation’s banks having already requested liquidity assistance from the ECB due to deposit outflows and the Greek government's continuing need to issue debt. Ultimately the outcome here is going to depend on how negotiations between Syriza and the Troika go, with Syriza’s desire to achieve meaningful debt relief for Greece along with a reduction in austerity and changes to the country’s structural reforms all on Syriza’s policy platform. It is likely that the twists and turns of these negotiations will form the main narrative for Greek risk in the coming weeks.”
“George sees a consensual outcome between the Greek government and its creditors as achievable but requiring very meaningful concessions from both sides and the chance of Greek government instability and fresh elections a possibility.”
“Looking slightly more widely, last night’s result marks a major political event for Europe and possibly a new era for European politics. It marks the first time that a non-mainstream party has won the reins of government in the aftermath of the crisis and may be a harbringer for more political turmoil to come for the region as non-mainstream parties grow ever closer to power. Syriza are the first to form a government.”
“Our plate spinning analogy for 2015 suggested that the central banks would keep the plates spinning aggressively until a cure for gravity (sustainable growth) or a policy error or a political accident.”
“With the ECB now being aggressive, the fall-out from yesterday's vote is likely to be limited unless no compromise can be made. However political risk is going to be the biggest challenge to the Euro over the years ahead. It might only take one rogue election result to seriously damage the whole project.”