FXStreet (Bali) – According to ANZ Research Team, it is still difficult to envisage a non-Grexit solution following the historic ‘No’ vote in Sunday’s Greek referendum.
Key Quotes
“There were some conciliatory gestures overnight in the hopes of talks resuming, with Greek PM Tsipras speaking with German Chancellor Merkel, the resignation of Greek Finance Minister Varoufakis, the ECB maintaining ELA assistance (capped) and euro area leaders respecting the referendum result itself.”
“The Greeks want (resumed) talks to include debt sustainability and say they are committed to reform; the mathematics of fiscal solvency doesn’t work without relief, growth is poor and unemployment is high (50% for 15-19 year olds).”
“There is nothing new there. The Europeans are putting on a brace face in response to the result (which was decisive) and want a sustainable budget resolution first before considering debt relief.”
“Caving into the Greeks risks opening Pandora’s Box across other peripherals that are also dealing with austerity. It also risks rising populism (especially with elections in Spain around the corner). Both sides have differing views and requirements on which horse needs to be in front of the cart, and that makes it difficult to envisage a non-Grexit solution.”
(Market News Provided by FXstreet)