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The Greek government has confirmed the extension of the Memorandum

27 November 2014 / 19:11:32  GRReporter
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The Greek Deputy Premier and exterior minister Evangelos Venizelos said that the memorandum of financial aid to Greece, which expires in late 2014, might be extended by a few days or weeks. He made his statements after his meeting with PM Antonis Samaras, and explained that the reasons behind the extension were of a "technical nature".

The meeting was held earlier today with the aim of discussing the results from the negotiations with the representatives of Greece’s creditors that finished yesterday in Paris without reaching an agreement.

In an interview for SKAI Radio, PASOK MP Christos Protopappas, who also participated in the discussion with the Troika, confirmed the information, which cropped up yesterday, that the creditors are for a six-month extension of the Memorandum after the end of this year. According to Protopappas, the Greek government wants to reach an agreement with the troika, but "not at any price."

The unsuccessful outcome of the Paris negotiations and the political changes this might cause in Greece have been discussed by all leading economic publications and major financial institutions.

According to an analysis by Barclays bank, the likelihood of snap elections, due to the impossibility of garnering the parliamentary majority needed for the election of a new president, is quite high.

The analysis highlights that premature elections might set off another political crisis. "A SYRIZA victory is almost certain, but investors will have two issues on their hands: firstly, to what extent will the radical left be able to soften its position and co-opt other parties into a coalition cabinet and, secondly, how strongly will the banks’ profits be affected by the probable postponing of reforms."

Barclays’ analysers believe that the MPs of the extreme right-wing party Independent Greeks will hardly support the government's presidential candidate. "As a result of this, it is very likely that premature elections will be held, but according to the latest polls, despite its advanced position, SYRIZA will most likely be short of the votes it need to form a government on its own," they write.

"In order to form a government, SYRIZA  will have to form a coalition with some of the more moderate parties. SYRIZA are intending to keep Greece in the Eurozone, and are no longer planning to scrap the agreements for the country's rescue, nevertheless they will need an additional mellowing of their most extreme policies to convince other parties to join a coalition with them."

Barclays quote the positive results of the stress test, which Greece’s systemic banks went through, but at the same time point out that everything in Greece is up to the forthcoming political developments.

Tags: Politics government creditors extending the memorandum presidential elections SYRIZA early elections
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