Submitted by Tyler Durden – ZeroHedge
The Greek situation summaries Greece by Deutsche Bank’s George Saravelos have consistently been among the best in the entire sellside. His latest Greek update, which is a must read for anyone who hasn’t been following the fluid developments out of southeast Europe, which fluctuate not on an hourly but on a minute basis, does not disappoint.
But while his summary of events is great, what is of far greater significance is his conclusion, namely that ultimately Europe will fold: “we consider the most likely outcome to be a Eurogroup offer of a new Third program” and “given that the current program expires this February the offer to negotiate a new Third program may provide political room for the government to sit on the negotiating table. At the same time such an offer is very likely to be attached to strict conditions, with the willingness to accommodate t-bill issuance an open question.Developments overnight suggest that this has become less likely, imposing maximum pressure on the government to reach agreement within a matter of weeks.”
If DB is right, and if Europe folds, the question then is what concessions will the ECB and the Eurozone be prepared to give to Italy, Spain and all the other nations where anti-European sentiment has been on a tear in recent months, and especially in the aftermath of Syriza’s stunning victory.
From Deutsche Bank
Over the last couple of weeks we have framed developments in Greece around three questions:
First, under what conditions would the Troika be willing to continue negotiating with Greece?
Second, does the Greek government accept these conditions?
Third, how does the ECB link Greek bank financing to program negotiation? Continue reading