FXStreet (Edinburgh) – Derek Halpenny, European Head of GMR at BTMU, assessed the upcoming vote in the Greek Parliament.
Key Quotes
“The euphoria, if you spotted it yesterday was brief with as many questions to be answered now as before a deal was agreed”.
“OK, Grexit is now off the table, but the deal agreed will keep the financial markets cautious over the near-term. The key next step toward formal approval of a new ESM loan will be the approval in Athens of the four demands laid out in the Euro Summit statement that must be legislated for by tomorrow night”.
“1) A streamlining of the VAT system; 2) Upfront measures on improving long-term sustainability of the pension system; 3) The granting of full independence to the state statistics office, ELSTAT; and 4) The introduction of quasi-automatic spending cuts if there is any fiscal slippage in order to ensure that primary budget surplus targets are adhered to”.
“There is speculation this morning that PM Tsipras is considering a government resignation once these measures have been passed in parliament given the scale of failure in his strategy to get a better deal for Greece”.
“The scale of division within Syriza in the upcoming vote could well determine that. The Greek parliament must also approve the overall contents of the Euro Summit statement released yesterday”.
“PM Tsipras will no doubt highlight the potential for a restructuring of Greece’s long term debt mentioned in the statement but it certainly cannot be described as a commitment”.
(Market News Provided by FXstreet)