Monday 6 July 2015

Tsipras holds all the cards, let's see how brave he is

The final result of yesterday's Greek bailout referendum was 61.31% No, 38.69% Yes with a turnout of 62.5%. This was an emphatic win for Prime Minister Alexis Tspiras who staked his career on the outcome and a blow to the opposition New Democracy whose leader, Antonis Samaras, has resigned.

European markets have yet to open but the impact on Asian markets has been muted. The €uro has predictably declined against the dollar but there has been no catastrophic devaluation overnight as the doom mongers were predicting.

Germany and France are having their own private meeting today before attending an emergency meeting of the €urogroup tomorrow where they will tell them what they've decided is going to happen. Merkel is under pressure to kick the Greeks out of the €uro but France is on the hook for a lot of Greek bailout money that they can't afford to lose.

Tsipras holds all the cards now. He has a mandate to reject the unsustainable and damaging EU bailout terms and if that means they get thrown out of the €uro and even the EU, the Greeks will be better off. Greece has nothing to lose.

Now we just need to see how brave Alexis Tsipras is.