Even after forming a coalition government, this will not entirely remove uncertainty around the success of Greece’s fiscal and structural adjustment efforts, is the comment of Eurobank EFG Equities.
The Research Department of Eurobank identify the following main challenges in the short-term:
1) Some level of programme renegotiation and eventual outcome (potential agreement for a softer form of austerity);
2) New measures to be passed in Parliament in the coming months. These may be indeed lower than the EUR11.5bn envisaged in the existing MoU for the 2013-14 period or could be extended over a larger period. Nevertheless, still stand likely to test the cohesion of the new govt;
3) Govt commitment to proceed with structural reforms, particularly those relating to the labour market and privatizations;
4) Improvement of public finances and achievement of primary surplus in Q1 2013.