2 Jul 2015
Tsipras breaking the level of trust between Greece and its creditors – BTMU
FXStreet (Barcelona) - Commenting on the key developments surrounding the Greece bailout issue and the referendum, Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, notes that recent actions from Greek PM Tsipras are only damaging the level of trust shared by the Hellenic Republic and its creditors.
Key Quotes
“The small chance that the referendum announced by PM Tsipras last weekend might not happen appears to be gone now with accusations by PM Tsipras of the EU blackmailing the Greek electorate having brought the level of trust between Greece and its creditors to a new low.”
“Indeed, the prospect of Syriza remaining in power beyond the referendum is a worrying one as it is extremely difficult to envisage these sides being able to return to the negotiation table. Eurogroup Head, Jeroen Dijsselbloem has stated that he sees no grounds for fresh talks until after the referendum.”
“In that sense, the result of the referendum is of course key. The latest poll points to growing support for the ‘Yes’ side. A GPO poll survey reported by ‘euro2day.gr’ revealed 43.3% would “definitely” vote yes while 39.3% would “definitely” vote no. The same poll (a separate question we guess) also showed that 74% were in favour of Greece staying in the single currency, which of course suggests that PM Tsipras’ argument to the Greek people that voting no is no to austerity and not no to the euro is gaining credibility. If that message wins over more people there is obviously a greater risk of a ‘No’ victory at the weekend.”
“That would not be good of course although even Germany has argued this week that it would not necessarily mean Greece exiting the single currency. It would also leave the ECB in a difficult position. The ECB yesterday chose to maintain the ELA support at Friday’s level of EUR 89bn but the longer the banks remain closed the higher the risk of social unrest and violence becomes – and that’s when the crisis could well escalate to the next level.”
Key Quotes
“The small chance that the referendum announced by PM Tsipras last weekend might not happen appears to be gone now with accusations by PM Tsipras of the EU blackmailing the Greek electorate having brought the level of trust between Greece and its creditors to a new low.”
“Indeed, the prospect of Syriza remaining in power beyond the referendum is a worrying one as it is extremely difficult to envisage these sides being able to return to the negotiation table. Eurogroup Head, Jeroen Dijsselbloem has stated that he sees no grounds for fresh talks until after the referendum.”
“In that sense, the result of the referendum is of course key. The latest poll points to growing support for the ‘Yes’ side. A GPO poll survey reported by ‘euro2day.gr’ revealed 43.3% would “definitely” vote yes while 39.3% would “definitely” vote no. The same poll (a separate question we guess) also showed that 74% were in favour of Greece staying in the single currency, which of course suggests that PM Tsipras’ argument to the Greek people that voting no is no to austerity and not no to the euro is gaining credibility. If that message wins over more people there is obviously a greater risk of a ‘No’ victory at the weekend.”
“That would not be good of course although even Germany has argued this week that it would not necessarily mean Greece exiting the single currency. It would also leave the ECB in a difficult position. The ECB yesterday chose to maintain the ELA support at Friday’s level of EUR 89bn but the longer the banks remain closed the higher the risk of social unrest and violence becomes – and that’s when the crisis could well escalate to the next level.”