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26 Jan 2015
Greece may seek an extension on ELA lending soon – ING
FXStreet (Barcelona) - Paolo Pizzoli of ING comments on the Greek election result and adds that the next Greek government will have to request an extension of the current programme, and another extension for ELA lending to Greek banks might be asked even sooner.
Key Quotes
“According to preliminary results (99.8% of votes scrutinized) Syriza has won 36.3% of the votes (149 seats, including the 50-seat bonus). ND came second with 27.8% (76 seats), Golden Dawn third with 6.3% (17 seats) and To Potami fourth with 6.1% (17 seats). In total, seven parties obtained parliamentary representation, passing the 3% threshold.”
“If the size of Syriza’s victory was clearly well beyond expectations, still it was not enough to give Tsipras the 151 seat absolute majority. Today, Tsipras will be given a three-day exploratory mandate to form a government by President Papoulias”
“In our view, Tsipras has good chances of success, although it is still uncertain whether support will come through direct involvement in the government or through external support.”
“As soon as a government is formed, negotiations with official lenders will likely start. However, chances of having the pending review of the current Greek programme completed before the extended end-of-February maturity look very thin.”
“It seems very likely that the next Greek government will soon have to request a further extension of the current programme and that a parallel extension for ELA lending to Greek banks will be asked for even sooner.”
“From the beginning Tsipras will have to strike a delicate balance between electoral promises and the need to reach a compromise with official lenders. In his victory speech last night in Athens, Tsipras declared the “end to the vicious cycle of austerity” and called the Troika “a thing of the past”. He also said he was ready to negotiate with Greece’s lenders for a “mutually acceptable” solution on the debt issue.”
Key Quotes
“According to preliminary results (99.8% of votes scrutinized) Syriza has won 36.3% of the votes (149 seats, including the 50-seat bonus). ND came second with 27.8% (76 seats), Golden Dawn third with 6.3% (17 seats) and To Potami fourth with 6.1% (17 seats). In total, seven parties obtained parliamentary representation, passing the 3% threshold.”
“If the size of Syriza’s victory was clearly well beyond expectations, still it was not enough to give Tsipras the 151 seat absolute majority. Today, Tsipras will be given a three-day exploratory mandate to form a government by President Papoulias”
“In our view, Tsipras has good chances of success, although it is still uncertain whether support will come through direct involvement in the government or through external support.”
“As soon as a government is formed, negotiations with official lenders will likely start. However, chances of having the pending review of the current Greek programme completed before the extended end-of-February maturity look very thin.”
“It seems very likely that the next Greek government will soon have to request a further extension of the current programme and that a parallel extension for ELA lending to Greek banks will be asked for even sooner.”
“From the beginning Tsipras will have to strike a delicate balance between electoral promises and the need to reach a compromise with official lenders. In his victory speech last night in Athens, Tsipras declared the “end to the vicious cycle of austerity” and called the Troika “a thing of the past”. He also said he was ready to negotiate with Greece’s lenders for a “mutually acceptable” solution on the debt issue.”