STOCK MARKET WATCH -- Monday, 1 June 2015

[mother earth]

15. Default to break impasse? Goldman Sachs thinks so, but not so black & white...

June 1, 2015
For full article:
http://www.telegraph.co.uk/finance/economics/11643374/Greece-may-need-to-default-to-break-impasse-says-Goldman.html

However, Goldman said a default by the Greek government would not be "quite as black and white as it might initially appear". He added that Europe could not simply force Greece out of the eurozone.

Mr Pill said: "By nature, sovereign defaults are political processes and, via grace periods and reviews, the rules and procedures governing payments to the IMF and European Central Bank embody a large element of discretion and flexibility. For example, the possibility of bundling June obligations to the IMF into a single end­month payment has recently been entertained.

"More importantly, euro exit is a political decision. For sure, the Greek authorities could decide to exit in a unilateral manner. But the current Greek government has no mandate to do so: if it announced an intention to leave the euro area pre­emptively, in our view the government would likely fall. Moreover, there is no process for euro exit defined in the governing European treaties: the practical and legal challenges could not be resolved overnight."