FXStreet (Delhi) – George Saravelos, Strategist at Deutsche Bank, notes that the Greece is moving towards stability even though the eventual path remains fraught with difficulty. The recent political developments and popular support towards underlying Eurozone membership are going to be the key underlying factors behind the country’s return towards stability.
Key Quotes
“There have been two major developments in Greece over August: the successful conclusion of 3rd ESM program negotiations and the precipitation of a new general election on September 20th.”
“The economy will suffer under the recent imposition of capital controls and large upfront fiscal tightening, but the worse may be behind us by the turn of the year.”
“It is Greece’s willingness to constructively, rather than confrontationally, engage with creditors that will ultimately determine whether Eurozone membership can be sustained.”
“In turn, this will depend on strong popular support towards the euro persisting, which has so far survived unscathed despite the recent crisis. The ingredients may be in place to generate a gradually improving outlook in coming months.”
(Market News Provided by FXstreet)