Greek political aftermath of referendum – TDS

FXStreet (Guatemala) – Analysts at TD Securities explained that their biggest concern on the Greek referendum initially was that even on a ‘Yes’ vote, the Syriza government might have been unwilling to step down.

Key Quotes:

“Comments this week seem to confirm Tsipris and Varoufakis would resign, which should limit that risk. Now, the biggest political questions we face centre on the post-referendum landscape.”

“Specifically, will Syriza agree to work in a national unity government or does the party split along ideological lines?”

“There, some faction might agree to work with one or more alternatives (New Democracy, PASOK, or To Potami). Ultimately, this could produce a more stable—and therefore positive—outcome. If Syriza remains intact and refuses to participate with a unity government, however, we expect a much more difficult road ahead. Almost certainly, we think a weak minority government would be the end result. This would complicate the relationship with creditors even further and could hasten early elections.”

“Early elections would only extend the surrounding Greece and, frankly, they have little time for such distractions. On a ‘No’ vote, however, the future will be much more uncertain. Syriza could still fracture and lead to a unity government. More likely, perhaps, they would take a No as a mandate to dig in their heels. This scenario leads to protracted uncertainty as creditors are unlikely to compromise.”

Analysts at TD Securities explained that their biggest concern on the Greek referendum initially was that even on a ‘Yes’ vote, the Syriza government might have been unwilling to step down.

(Market News Provided by FXstreet)