FXStreet (Edinburgh) – Jim Reid, Analyst at Deutshe Bank, exposes his views on the Greek front.
Key Quotes
“So looking at the timeline from now, a Wednesday deadline for the Greek parliament vote has been set. Assuming this passes, focus will be on the ECB and whether they adjust the ELA cap (there was no change in the cap yesterday)”.
“Attention will then turn to the European parliamentary approval process with Reuters suggesting the Bundestag is set to vote on Friday”.
“This will allow for formal negotiations to start and discussions of bridge financing which will likely cover July and August obligations before more proposals will need to be passed in September allowing for a full ESM program”.
“For now though the focus will be on the Greek parliamentary vote. Tsipras’s coalition partners the Independent Greeks, as well as the Left Platform faction of Syriza have already voiced their objection and so it’s looking likely that Tsipras will need to rely on opposition votes”.
“So an obvious positive step forward but implementation risks remain high and in the meantime the Greek economy will face significant pressure on the back of fiscal tightening and a bank recap program. It’s also likely that we see a significant change in the political landscape in Greece which could remain a persistent source of risk as the year progresses”.
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