12 May 2015
Is a referendum on euro membership a possible solution for Greece? – ANZ
FXStreet (Barcelona) - Economists at ANZ, comment on the key developments surrounding the Eurogroup-Greece talks, and further note that a referendum in Greece about euro membership might be a possible solution.
Key Quotes
“The focus in European FX was on Greece’s deteriorating liquidity position as reports indicated that the EUR750m repayment to the IMF has been executed, but there is precious little money now remaining.”
“The ongoing saga of the Greek government drawing a line in the sand over pension cuts and collective wage bargaining added to tension ahead of Monday’s euro group meeting.”
“Nevertheless, early reports from the meeting suggested that the euro area’s finance ministers welcome the progress that Greece is making towards receiving aid, but that more work needs to be done.”
“One possible solution mooted recently (and articulated by German FM Schaeuble yesterday) is for a possible referendum in Greece on euro membership as a way to address domestic political difficulties. 75-80% of the Greek population say they are in favour of staying in the euro. If Greece opted to stay in, it must comply with its commitments. Otherwise, a no vote on euro membership could hasten the country’s exit.”
“This idea may gain traction in coming weeks if the talks with creditors don’t yield the necessary progress.”
Key Quotes
“The focus in European FX was on Greece’s deteriorating liquidity position as reports indicated that the EUR750m repayment to the IMF has been executed, but there is precious little money now remaining.”
“The ongoing saga of the Greek government drawing a line in the sand over pension cuts and collective wage bargaining added to tension ahead of Monday’s euro group meeting.”
“Nevertheless, early reports from the meeting suggested that the euro area’s finance ministers welcome the progress that Greece is making towards receiving aid, but that more work needs to be done.”
“One possible solution mooted recently (and articulated by German FM Schaeuble yesterday) is for a possible referendum in Greece on euro membership as a way to address domestic political difficulties. 75-80% of the Greek population say they are in favour of staying in the euro. If Greece opted to stay in, it must comply with its commitments. Otherwise, a no vote on euro membership could hasten the country’s exit.”
“This idea may gain traction in coming weeks if the talks with creditors don’t yield the necessary progress.”