The Greek Situation
I will hold you forever – Adonis
Thanks Ian 🙂
There are not many options that are conceivable and the situation has taken up financial headlines for the last couple of months. Either they:
· Put forward and implement a credible reform plan, which appeases both those in the Eurogroup and are in some way is acceptable to those anti-austerity politicians in Greece, including the left wing who have criticized the government about privatisation plans.
· There is no reform and Greece pays off its debts when they become due. We see this as a ‘rob Peter to pay Paul scenario’ which in the long term is unsustainable and leaves politicians in the Eurozone tired and frustrated. We see that there will be a positive correlation between the amount of time it goes on and inhabitant backlash within those Eurozone countries; especially those that have not had such favourable terms and lengthy discussions when they have faced difficulty in the past.
· Either due to frustration and the lengthy discussions, those in the Eurozone will walk away and allow Greece to default and exit the Eurozone (we see this as unlikely). Alternatively, Greece could decide to exit the single currency, this could be for a number of reasons, most specifically pressure from the left wing and the Greek people who are tired of austerity and want Alexis Tsipras to ‘stay true’ to his election promises. This will temporarily rock the financial markets as it will question the common the common currency.
It was expected that all reforms would have been agreed or at least submitted by independence day. Today is the parade and there is still no agreement. The new Greek government decided to remove barriers and permit people to attend the parades in close proximity to them, which is symbolic of their aim to show that they are at one with the people and there is no need to have austerity protests. However, we will see in the coming weeks and hopefully not months, how this plays out.