“So we have a deal for Greece; it is being described variously as a “big kick of the can”, a “coup” and “not worth anything because of the clear lack of trust,” he said. “Easy to be cynical, but the fact that a deal has been done shows a willingness to avoid the alternative of Greece leaving the euro – for now at least. It has been an unedifying spectacle and has sharpened the focus on some of the euro area’s structural fault lines – Franco-German relations; the tensions created by giving up sovereignty and still wanting a democratic mandate to govern a nation state; the shortfall of real integration,” Iggo added.
A particularly acute aspect of the difficulty Greece will inevitably continue to face is the burned bridges which resulted from the confrontational negotiations, and the fact that many would now prefer Greece to exit the euro than stay.
“The Greeks were outplayed by their own poker game,” said Kevin Lilley, manager of Old Mutual European Equity ex-UK fund.”They thought the Europeans would blink and give them what they wanted, but the line from the Germans, Spanish, Finish and the Balkans has hardened. Their biggest mistake was the referendum two weeks ago, which just hardened this line even further, as I think there are many European nations which would be happy to see Greece exit the eurozone,” Lilley said.
“We are unlikely to see an end to the Greek saga this week, dramatic or otherwise,” Nitesh Shah, research analyst at ETF Securities. “The deal announced this morning still needs to be approved by the Greek parliament. Given the staunch opposition to further austerity and rigorous monitoring we are likely to see further rounds of arduous negotiations.”
