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Greece: Crumpling under debt burden – Swissquote

FXStreet (Delhi) – Yann Quelenn, Market Analyst at Swissquote, notes that the recently concluded Greece elections are seen more than anything as a reminder of the failure of European negotiations, which will only result in more austerity policies and sounds ironic for a leftist government.”

Key Quotes

“A week has passed since Syriza won the new elections, allowing the new Government to vote the reforms which have been agreed to the European Union under the bailout plan. “It is clear that the Greek people were definitely not resentful about the U-turn that Prime Minister Alexis Tsipras made after the “OXI” vote (no vote) in July when he decided to agree on a worse deal agreement.”

“There is a huge contradictory issue here. The Greeks understand the hefty price that comes with staying in the Eurozone but there is this widespread belief that a Grexit would have had even worse repercussions.”

“Alexis Tsipras speech on Sunday at the United Nations Summit addressed the necessity for debt restructuring. Indeed we believe that the current bailout plan only serves to gain time.”

“Greece was not able to reimburse its debt three years ago; it certainly cannot do so now with even more interest to pay. Furthermore, the required growth to manage this debt is impossible to reach for Greece. Tsipras is fully aware of this, adding that debt is a challenge “at the centre of our global financial system”. The future does not seem so bright for Greece.”

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