6 Jul 2015
Greek referendum: Is it all over? 2/3 chance Grexit - Commerzbank
FXStreet (Bali) - In the case of a Greek 'No', as now confirmed, Dr Jörg Krämewe, Chief economist at Commerzbank, give this scenario a likelihood of two thirds.
Key Quotes
"If the Greeks vote against a compromise with the creditors on Sunday, Greece would not have the money to redeem the government bonds held by the ECB (€3.5 bn) on 20 July. The ECB would then have no choice but to declare the insolvency of the Greek state, and thus its banks. The ECB would then presumably have the support of the heads of state and government to cease ELA loans completely, which would effectively mean the end of Greece’s euro zone membership (Grexit). In the case of a Greek “no”, we give this scenario a likelihood of two thirds."
"That said, it is possible that even in the case of a negative referendum vote, EU heads of government will duck out of taking a clear line and will negotiate further with Greece. It will then be difficult for the ECB to completely end the ELA loans, meaning that Grexit will not happen immediately. Ultimately, the politicians will decide the fate of Greece’s euro zone membership, even though the ECB continues to give the impression that its action on ELA lending in accordance with the rulebook will be the decisive factor."
Key Quotes
"If the Greeks vote against a compromise with the creditors on Sunday, Greece would not have the money to redeem the government bonds held by the ECB (€3.5 bn) on 20 July. The ECB would then have no choice but to declare the insolvency of the Greek state, and thus its banks. The ECB would then presumably have the support of the heads of state and government to cease ELA loans completely, which would effectively mean the end of Greece’s euro zone membership (Grexit). In the case of a Greek “no”, we give this scenario a likelihood of two thirds."
"That said, it is possible that even in the case of a negative referendum vote, EU heads of government will duck out of taking a clear line and will negotiate further with Greece. It will then be difficult for the ECB to completely end the ELA loans, meaning that Grexit will not happen immediately. Ultimately, the politicians will decide the fate of Greece’s euro zone membership, even though the ECB continues to give the impression that its action on ELA lending in accordance with the rulebook will be the decisive factor."