In a note to clients Monday, Goldman Sachs warned that “the platform on which the current Greek government was elected–retaining the euro but with no further adjustment and/or external oversight–is not feasible. Facing this reality, a new political mandate–and thus a new government, a referendum or elections–will be required in Greece.”
Goldman’s analysts also warned that default and capital controls “may be necessary…in order to break the current impasse in negotiations.”
Analysts at Bank of America-Merril Lynch also poured cold water on Tsipras’ attempts to curry favor with other governments by pouring his scorn only on the technocrats, seeing it as out of touch with reality in other Eurozone capitals.
Among the reasons why the Europeans feel they can afford to apply massive pressure on Greece is a sense that, contrary to three years ago, the idea that Greece could set a general pattern for the whole periphery is much less credible,” analysts at BAML wrote Monday. “Ireland and Portugal have successfully exited from the programmes, Italy is much more stable politically and Spain much stronger economically. Greece now is very much in a league of its own.”