Greece referendum: A ‘No’ vote won’t trigger a Grexit – BBH

FXStreet (Barcelona) - The Brown Brothers Harriman Team comments on the key risks ahead surround the Greece crisis – Referendum and IMF repayment due tomorrow.

Key Quotes

“The markets initially responded dramatically to the weekend new of the Greek referendum, capital controls and an extended bank holiday. The markets quickly stabilized and have recovered a bit in the European morning.”

“The referendum is about accepting conditions of an offer regarding the second aid package that expires tomorrow. Despite the government's push for a "no" vote, the polls suggest the "yes" camp is ahead. A "yes" vote would likely topple the government. A "no" vote would not necessarily trigger a Greek exit from EMU.”

“The Greek government in essence appears to be saying that it would rather not lead Greece if there is no alternative to the creditors' demands.”

“Meanwhile, more immediately, the IMF payment is due tomorrow. Many now think Greece will miss it and slip into arrears. While the rating agencies are unlikely to take immediate action, European creditors could respond. The fog of uncertainty makes for fragile markets.”