FXStreet (Guatemala) – Analysts at TD securities explained that the weekend will continue to bring updates here, but we think recent comments support our expectation that a deal still remains marginally more likely than a Grexit.
“A deal this weekend means only that there is “sufficient basis to start formal negotiations.” It does not imply that a finalized deal will be done by Sunday night.”
“Importantly, Merkel must manage domestic political pushback. This is why she continues to play bad cop to France’s good as Francois Hollande has been helping to move the process forward.”
“More detail on debt reprofiling remains likely to emerge as part of the deal. We see scope for the EFSF debt to be rescheduled such that it is still compliant with the Eurozone treaty as it is not direct government-to-government funding.”
“There are still questions over exactly how the banking consolidation and recapitalization will happen while the necessary approvals by national Parliaments will also cause some delays. We do not think either of these potential complications would scuttle a deal if one is reached this weekend, but Greek leaders have so far been silent on what is likely a need to consolidate the Greek banking sector and fund it through some combination of bail-in and new capital.”
(Market News Provided by FXstreet)