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3 Jul 2015
Greece referendum: Tsipras says banks will not open without a deal – RBS
FXStreet (Barcelona) - The RBS rates research team, note that Greek PM Tsipras’ comment that banks would remain shut until there was a deal between Greece and its creditors will only bolster a ‘yes’ vote in the Greece referendum.
Key Quotes
“Greek PM Mr Tsipras admitted publically yesterday that banks would not open until there was an agreement between Greece and its lenders. This has been clear to most market participants but until yesterday most central government officials have maintained that banks could open early next week, so this admission by the PM has made the frontpages of most of the Greek press and is not insignificant at this stage of the campaign. As we argue, we expect the closure of the banks and worsening of economic conditions to bolster the yes vote.”
“Nonetheless, most polls show a very close result between "yes" and "no" on Sunday. A "no" is not irretrievable but would make Grexit our base case scenario. A second referendum would certainly not be off the cards, if not likely.”
“Meanwhile, a "yes" vote would bolster significantly Greece's probability of staying within the Euro, but new elections would likely be necessary in a few weeks. The economic deterioration since last week means the new bailout which will be necessary could certainly end up having "worse" terms than those being voted upon in the referendum, although as the IMF document released last night showed debt relief will now be all but inescapable for Greece's public sector creditors if Greece is to remain in the Euro.”
Key Quotes
“Greek PM Mr Tsipras admitted publically yesterday that banks would not open until there was an agreement between Greece and its lenders. This has been clear to most market participants but until yesterday most central government officials have maintained that banks could open early next week, so this admission by the PM has made the frontpages of most of the Greek press and is not insignificant at this stage of the campaign. As we argue, we expect the closure of the banks and worsening of economic conditions to bolster the yes vote.”
“Nonetheless, most polls show a very close result between "yes" and "no" on Sunday. A "no" is not irretrievable but would make Grexit our base case scenario. A second referendum would certainly not be off the cards, if not likely.”
“Meanwhile, a "yes" vote would bolster significantly Greece's probability of staying within the Euro, but new elections would likely be necessary in a few weeks. The economic deterioration since last week means the new bailout which will be necessary could certainly end up having "worse" terms than those being voted upon in the referendum, although as the IMF document released last night showed debt relief will now be all but inescapable for Greece's public sector creditors if Greece is to remain in the Euro.”