In light of yeasterday's agreed deal, and broad support from the political
parties domestically. Barclays assumes the risks of a Greek exit have reduced in
the short term as the ECB should remain supportive as long as prior actions are
passed in Parliament by next Wednesday and talks are headed in the right
direction. Although a legal barrier, we do not think that national Parliamentary
votes will jeopardise this agreement, which has been supported at the highest
political level.
Last Friday's Greek Parliament vote on Greece's own proposals had already marked a non-negligible setback for PM Tsipras, evidencing divisions within an already unstable coalition. Out of 300 MPs, 251 voted in favour of the measures, 32 voted against them (2 from Syriza), 8 abstained (all Syriza) and 9 were absent (7 from Syriza). Out of the Syriza/Anel (162 MPs) coalition, 17 Syriza MPs voted no, abstained, or were absent, which means that PM Tsipras had to get votes from other parties to pass the bill (the coalition only has a buffer of 11 MPs).
Following this weekend's reported agreement, PM Tsipras will likely have to pass even tougher measures through Parliament by Wednesday 15 July. Although further cracks within his majority are likely as more red lines are crossed, therefore, "constructive" centrist parties is likely to continue to support the government coalition, says Barclays. This support is likely to come at a cost when the timing is right. Furthermore, it makes more sense for them to let PM Tsipras bear the political cost of capital controls.
"Triggering elections now would make Greek default inevitable, while plunging the country into paralysis for the next 30 days. Although unlikely, we do not entirely rule out a coalition partner change (with To Potami), and believe this situation would eventually lead to new elections after the summer. As the Tsipras administration is forced to make further concessions, we would expect further pushback by several members of the radical left platform of the Syriza administration, likely exposing further the current coalition's instability, according to Barclays.
Source : FX-Primus
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#Forex
#SaleForex
#GreeceDeal
#RisksRemainsHigh
#GreekDebt
Last Friday's Greek Parliament vote on Greece's own proposals had already marked a non-negligible setback for PM Tsipras, evidencing divisions within an already unstable coalition. Out of 300 MPs, 251 voted in favour of the measures, 32 voted against them (2 from Syriza), 8 abstained (all Syriza) and 9 were absent (7 from Syriza). Out of the Syriza/Anel (162 MPs) coalition, 17 Syriza MPs voted no, abstained, or were absent, which means that PM Tsipras had to get votes from other parties to pass the bill (the coalition only has a buffer of 11 MPs).
Following this weekend's reported agreement, PM Tsipras will likely have to pass even tougher measures through Parliament by Wednesday 15 July. Although further cracks within his majority are likely as more red lines are crossed, therefore, "constructive" centrist parties is likely to continue to support the government coalition, says Barclays. This support is likely to come at a cost when the timing is right. Furthermore, it makes more sense for them to let PM Tsipras bear the political cost of capital controls.
"Triggering elections now would make Greek default inevitable, while plunging the country into paralysis for the next 30 days. Although unlikely, we do not entirely rule out a coalition partner change (with To Potami), and believe this situation would eventually lead to new elections after the summer. As the Tsipras administration is forced to make further concessions, we would expect further pushback by several members of the radical left platform of the Syriza administration, likely exposing further the current coalition's instability, according to Barclays.
Source : FX-Primus
#FX
#Forex
#SaleForex
#GreeceDeal
#RisksRemainsHigh
#GreekDebt
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