2 Jul 2015
Greece referendum: Neither a ‘yes’ nor a ‘no’ will lead to a solution – ING
FXStreet (Barcelona) - Economists at ING, share the possible impact on Eurozone, Greece and the bailout issue from the Greece referendum vote.
Key Quotes
“In case of a ‘yes’ vote, the Eurozone would be willing to start new negotiations quickly but probably not with the current Greek government, rather with a government of national interest or a new government after new elections. The Eurozone would probably offer a third programme, coupling reasonable fiscal discipline (without excessively ambitious primary surplus targets) with a population/growth friendly investment programme. This could have a strong power against the surging populist movements in Spain and Italy. However, what would happen if Greece would get new elections and Tsipras would win them?”
“In case of a ‘no’ vote, of course, things would be much more complicated. Tsipras would take it as a popular mandate for new negotiations in Brussels. It is hard to see that after the last events, the Eurozone has a huge appetite for these negotiations. On the other side, however, ignoring the Greek peoples’ will would also be hard.”
“In our view, the Eurozone would not immediately let Greece fall after a ‘no’ vote but it would be very difficult for the ECB to continue ELA, even not at its current level. Even if negotiations between the Eurozone and Greece would continue after a ‘no’ vote, these negotiations would be very likely too difficult, defiant and slow for the ECB not to stop ELA. A new chaos and eventually a Grexit in the making.”
“The inconvenient truth on the Greek referendum is that neither a ‘yes’ nor a ‘no’ vote will lead to a quick solution and a return to normality.”
Key Quotes
“In case of a ‘yes’ vote, the Eurozone would be willing to start new negotiations quickly but probably not with the current Greek government, rather with a government of national interest or a new government after new elections. The Eurozone would probably offer a third programme, coupling reasonable fiscal discipline (without excessively ambitious primary surplus targets) with a population/growth friendly investment programme. This could have a strong power against the surging populist movements in Spain and Italy. However, what would happen if Greece would get new elections and Tsipras would win them?”
“In case of a ‘no’ vote, of course, things would be much more complicated. Tsipras would take it as a popular mandate for new negotiations in Brussels. It is hard to see that after the last events, the Eurozone has a huge appetite for these negotiations. On the other side, however, ignoring the Greek peoples’ will would also be hard.”
“In our view, the Eurozone would not immediately let Greece fall after a ‘no’ vote but it would be very difficult for the ECB to continue ELA, even not at its current level. Even if negotiations between the Eurozone and Greece would continue after a ‘no’ vote, these negotiations would be very likely too difficult, defiant and slow for the ECB not to stop ELA. A new chaos and eventually a Grexit in the making.”
“The inconvenient truth on the Greek referendum is that neither a ‘yes’ nor a ‘no’ vote will lead to a quick solution and a return to normality.”