FXStreet (Barcelona) – The Brown Brothers Harriman Team comments on the ongoing Greece crisis, noting that Merkel is now appearing to take control of the negotiations just as Tsipras did by removing the Greece FM.
Key Quotes
“It is nearly a foregone conclusion that today’s Eurogroup meeting will not provide closure for the Greek crisis. Merkel’s speech to the German parliament today showed no sign that the creditors are yielding. The EU Summit a week from now is the next real opportunity. This is important. Just as Greece’s Tsipras had removed his finance minister from negotiations in the hope that it created a less antagonistic atmosphere, so too now does Merkel appear to be taking control of the negotiations from her finance minister.”
“Known for her caution, and moving at the last possible moment, as she did with Greece back in 2010-2011, Merkel may have waited too long this time as positions have hardened, and trust has been further eroded. Ultimately, national interests are involved. Germany is acting like a creditor and Greece is acting like a debtor. When the shoes were on different feet, Germany acted like a debtor and Greece a creditor. Each drapes their position in moralistic terms.”
“We continue to believe that a Greek exit would be more costly for Europe and Greece than a compromise here. There is a trilemma playing out between, austerity, reform, and debt relief.”
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