EUROZONE-GREECE/ATHENS-MARKET ANALYSTS Analyst says bailout deal means economy averted danger, despite PM resignation

Record ID: 143118

  • Title: EUROZONE-GREECE/ATHENS-MARKET ANALYSTS Analyst says bailout deal means economy averted danger, despite PM resignation
  • Date: 21st August 2015
  • Summary: ATHENS, GREECE (AUGUST 21, 2015) (REUTERS) INTERIOR OF ATHENS STOCK EXCHANGE VARIOUS OF SHARE PRICE TICKERS (SOUNDBITE) (Greek) FINANCIAL ANALYST, NIKOS KAFKAS, SAYING: "Even though the market fell in its opening today, it has since recovered and, apparently, it has not succumbed to pressure. We should not forget that there is a deal on the table now. A major problem for t
  • Embargoed: 5th September 2015 13:00
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  • Location: United Kingdom
  • Country: United Kingdom
  • Topics: General
  • Reuters ID: LVA4BC31MZKQZ7OQEZ7855V3XFT
  • Aspect Ratio: 16:9
  • Story Text: A financial analyst said on Friday (August 21) that the bailout deal the Greek prime minister signed and began to implement before resigning on Thursday (August 20), meant that the economy would not be unduly shaken ahead of early elections.
    The Greek stock market dipped slightly in early trading but stayed steady.
    "Even though the market fell in its opening today, it has since recovered and, apparently, it has not succumbed to pressure. We should not forget that there is a deal on the table now. A major problem for the economy has been averted, at least in the short term, also thanks to the (disbursement of the) loan tranche. I believe that we are now moving forward towards the next day, even if it comes with a two or three-week delay," said financial analyst Nikos Kafkas.
    Kafkas said elections would not affect the terms of the agreement and indeed could even strengthen it.
    "I'd rather we moved straight to a national unity government. After all, elections may pave the way for a national unity government. We could have avoided elections. The government and the prime minister have decided to pursue a different path. However, I don't think (the government's decision) will largely affect the agreement," said Kafkas, adding: "There's always a risk involved when you go into elections. However, in our case, considering that 70-75% of Greeks wish to stay in the Eurozone, I believe there won't be any big surprises in store. If one or two more parties are elected in the government, this could probably be interpreted as further support to the agreement. It may be beneficial (for economy)."
    Greek Prime Minister Alexis Tsipras who quit on Thursday (August 20), is hoping to strengthen his hold on power in a snap election after seven months in office in which he fought Greece's creditors for a better bailout deal but had to cave in and accept more onerous terms.
    However, National newspapers on Friday reflected Greeks' concerns over snap elections as many said they were unhappy over the decision of Prime Minister Alexis Tsipras to resign.
    Richard Hunter, working at Hargreaves Lansdown - a UK based financial service company, warned of more uncertainty to come but was confident that the bailout package would remain after the elections.
    "It does without question introduce another element of uncertainty but given where we are and how far we have come in terms of the fact that it has already been voted in through the Greek parliaments and indeed all the other necessary European parliaments the bailout should be very much in place," he said.
    Another financial analyst James Bevan, Chief Investment Officer at CCLA - a specialist investment management company, said the real challenge ahead was for the Greeks to stick to the reforms, otherwise the bailout package could be at risk.
    "It was always the case that Mr. Tsipras would require a confirmation from the Greek people that the policies that he wanted to continue to run with, were the policies that they were prepared to support. However, that said, it is equally clear that the challenge now of the reform agenda is back in the melting pot. If there is any back sliding whatsoever on the implementation, then clearly the bailout package is also at risk," said James.
    Greece's president Prokopis Pavlopoulos will formally give the conservative opposition a chance on Friday to form a new government, but the country appears almost certain to be heading to elections next month.
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