Galery

1

Apart from the Capital fund e-mail, which leaked on the web a few hours ago, Bank of America-Merill Lynch mentioned the meeting with Giorgos Statakis and Yiannis Milios in a message to its customers.

In its e-mail, the bank likens SYRIZA’s programme to a real ancient Greek tragedy, and points out that the party has no plan B in the event of non-acceptance of its position on debt relief, transfer of government bonds and an additional buyback scheme.

The bank also conveys the concerns among foreign investors caused by the fact that if SYRIZA wins the elections, Greece might turn into a negative example for other European countries to follow over again: Spanish elections are forthcoming and the left-wing Podemos (‘we can’) has the lead.

Bank of America summarises four key elements in what Giorgos Statakis laid down:

• No new reforms will be attempted.
• Europe needs to forgo the Greek debt.
• ECB must sell the Greek bonds it owns, and buy a lot more.
• There is no plan B in case creditors say no.

As a conclusion, the bank points out that investors should expect a heightened volatility in Greece over the next few months, adding that SYRIZA "is far away from the Troika and the current rescue programme. Even if some middle road is to be found, this could take the whole of 2015, with hazards continuing to loom large meanwhile."

BofA-Merill Lynch summarise the following key points in what Giorgos Statakis said:

• The IMF programme will be terminated, with the party being prepared to negotiate the next financial programme only with Europe.
• Talks will be held for the restructuring of public sector loans. Slashing the debt would be perfect, but the rescheduling of payments might be the first step in the right direction. A request will be filed with the ECB to postpone in time the Greek sovereign bonds in its possession.
• The Greek state will carry on servicing its sovereign bonds.
• Greece will stay on in the Eurozone no matter what scenario is chosen.
• No new privatisations will be carried out.
• No to primary surpluses, and no to balanced budgets. SYRIZA are expecting that the troika is going to revisit its unrealistic objectives at any rate, according to which Greece must produce a primary surplus of 4.5% of GDP over the next 10 years.
• The following funding sources will be made available: 1) restructuring the public portion of debt; 2) achieving access to markets; 3) transfer of Greek bonds owned by ECB; 4) adopting a Quantitative Easing programme by ECB.
• There is no plan B if creditors say ‘no’– or at least SYRIZA has not unveiled one.
• Increasing minimum wages and pensions up to pre-crisis levels and a restoration of the collective bargaining of wages.
• Adopting a more progressive tax system and combating tax crime. Traditional parties never had the political will to address these issues.
• Pressure is to be put on banks to ramp up their lending to the economy.
• SYRIZA is certain about March election results (Statakis even specified the date as 22 March). He believes the government might ward off early elections only if the troika dishes out everything it wants, which is highly unlikely. Quite the opposite, SYRIZA’s representative was surprised by the Troika’s tough position during the last round of negotiations.
• SYRIZA is adamant about its imminent election victory and hopes to be able to form a government on its own.
• An eventual agreement of the current government with the Troika would facilitate the future SYRIZA government as it would provide more time for negotiating the restructuring of the public sector debt.
• During the exchanges, most of the guests who were BofA-Merill Lynch customers, said they could not see how the rest of the European countries, never mind the ECB, were going to turn a blind eye and satisfy SYRIZA’s demands if the party failed to respect the agreement on the programme. Some also highlighted that the Europeans might wish to get tough on SYRIZA’s eventual government due to concerns created by the rise of the left-wing Podemos in Spain (the country will be holding elections in November, with the movement leading in the polls). They don't see any trumps up Greece’s sleeve during negotiations. Statakis replied saying that supporting Greece was in everybody's interest; the current programme was unsatisfactory for them and negotiations might lead to a more realistic solution, which would benefit everyone.