ATHENS | By Nick Malkoutzis via MacroPolis | If there was any doubt that the negotiations between the new Greek government and its lenders are going to be incredibly tense, there isn’t now. The European Central Bank’s decision on Wednesday night to stop accepting Greek government bonds as collateral from local lenders has minimal practical impact in the short-term but maximum effect in symbolic terms.
LONDON | Sigrún Davíðsdóttir | Forget economics, politics is key to understanding the Eurozone. The cries of “Grexit” lately have mostly been a repetition of an earlier discourse: in February 2012 Citi’s economists Willem Buiters and Ebrahim Rahbari coined the term “Grexit,” by July 2012 estimating its likelihood to 90%. Cheered on by the media, economists have taken over the debate of the Eurozone which is why much of it has been such a futile exercise: it is not economics, which ties the Eurozone together but the political determination of its leaders to make the euro work. With political will likelihood of any exit is 0. Ergo, Grexit is as unlikely now as it has always been in spite of the EU brinkmanship. One route Greece seems to be exploring is a tried and tested one: the “bisque clause” from 1946.
MADRID | By Sean Duffy | Today is a massive day for the euro zone. The outcome of negotiations between Greek politicans and European bosses will be closely monitored by markets and euro zone partners alike. With Greek banks under pressure, a deal needs to be agreed soon.
Madrid | By Sean Duffy | Yanis Varoufakis has been causing quite a stir on his trip around Europe. The Greek Finance Minister will meet with his Italian counterpart on Tuesday, and both will be watching market reaction to proposals leaked by the Greek Government last night.
MADRID | By Sean Duffy | Markets will be looking to how relations between the new Greek Government and European creditor nations play out in the week ahead. After a week of tense negotiations, the stakes are increasing all the time. Greek claims of insolvancy have irked its eurozone partners, but can all sides find a middle ground in the coming days?
By Gabriel Sterne via MacroPolis | It is easier to write down big questions on Greece’s future; harder to answer them: (1) Will Syriza win with an overall majority?; (2) Will a new programme be agreed in time?; (3) To what extent will it stay on track?; (4) How much additional debt relief and financing will the Troika give to Greece, and in what circumstances?; (5) If and when the wheels come off the programme, is an exit inevitable? Would it be managed or chaotic? One thing we can be sure about though. The scene is set for a political showdown, the likes of which the Euro-crisis has not yet seen.
MADRID | By JP Marín Arrese | As Greece plunges again into wild uncertainty, following a call for snap elections, once again the Eurozone shivers at the prospect of a full-fledged crisis. Even if the flight for safety has reduced the bund rates to fresh lows, no other economy has come under attack for the time being. But should Syriza emerge as the winning party in the January polls, the truce might be over.
MADRID | By Ana Fuentes | The possibility that leftist party SYRIZA wins next Greece’s elections on January 25th is hitting the European markets since this may involve a new kind of arrangement with Brussels about the country’s bailout and the precautionary line. According to Greek journalist at Macropolis, Nick Malkoutzis, “if the party offers structural reforms that would clean up Greek politics, improve tax collection and make the public administration more efficient, the Eurozone might be prepared to listen to what SYRIZA has to say”.
MADRID | The Corner | Greece’s prime minister failed to get his presidential candidate confirmed, which will lead to an early parliamentary election that could end the nation’s international lifeline. It was important that the Greek government reached an agreement to appoint a new PM. However, the third and decisive time only gave 168 votes to Antonis Samaras, the same as in the previous round. This means that there will be early elections and the possibility of Syriza reaching the government is even closer.