“The latest Greek debt deal is at the behest of German Chancellor Angela Merkel and the needs of the domestic political landscape there rather than about ensuring Greece’s long term economic well- being, analysts told CNBC Tuesday.
“They’ve done the bare minimum just to keep the show on the road to prevent Greece from falling apart and having to leave the euro in the next few months. They’ve not done enough to get Greece back to a sustainable economic or fiscal path,” Michael Saunders, chief economist for Western Europe at Citi, told CNBC Europe’s “Squawk Box”.
“A few months ago Merkel herself made a decision that Greece would not leave the euro until the German election is passed because she feared she herself would be blamed for any adverse political and economic consequences. That’s why this deal has been done. Merkel wants to keep the show on the road for the time being,” he said.
The latest deal, secured late on Monday, will see Greece’s debt level lowered to a more sustainable level and lead to the release of the next tranche of aid of $44 billion needed to keep the country solvent.”Twitter