News Analysis: Italian analysts to monitor possible Greek debt renegotiations after Syriza victory

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Italian analysts are keeping a close watch on what they expect to be a compromise solution to debt problems of bailed-out Greece following Syriza's electoral victory on Sunday.

The leftist party of charismatic leader Alexis Tsipras achieved a sweeping victory on promises that he will scrap the country's strict austerity program.

"Markets reacted quite positively today. There was not a panic effect after the Greek electoral result," Maurizio Mazziero, a financial analyst and founder of Mazziero Research, an independent financial research firm based in Milan, told Xinhua.

The Milan stock exchange on Monday closed with a rise of 1.15 percent.

In Mazziero's view, Tsipras will demand a loosening of the austerity policies imposed on Greece by the so-called troika of creditors, namely the European Commission (EC), the International Monetary Fund (IMF) and the European Central Bank (ECB), in return for 240 billion euros (about 269 billion U.S. dollars) of aid that saved Greece from bankruptcy.

"I think a discussion will be started in order to gain time and reach the moment when the ECB could make purchases of Greek bonds in July, through the newly-launched quantitative easing program, if there is a deal," Mazziero said.

According to Italian analysts, debt cancellation and a consequent "Grexit," or potential withdrawal of Greece from the eurozone, is highly improbable as it would trigger very serious consequences for the entire single currency union.

"An exit from the monetary union is not impossible from a theoretical point of view, but is strongly improbable," Gregorio De Felice, chief economist at the Intesa Sanpaolo bank, said in an interview with Rome-based la Repubblica newspaper.

A Grexit would be inconvenient both for Greece and other European countries, De Felice said. A return to the drachma would mean a depreciated currency for Greece, a strong importer, with a consequent erosion of families' purchasing power. This would also imply high costs for European lenders which have financed most of Greek debt, he noted.

In his view, the most likely outcome will be "an agreement that may imply a grace period on debt repayment, a reduction of interest rates, a postponement of Greek commitment to reforms, but not a debt cut."

Il Sole 24 Ore, Italy's leading economic newspaper, wrote that the fear of a euro break-up and contagion were almost totally removed from the marketplace in 2012, when the ECB created aid tools to protect the single currency.

Support for eurosceptic parties has risen across Europe, but if the Troika renegotiates the Greek aid program to enhance growth and create jobs, then market sentiment would be able to digest the political jitters to make space for more cohesion in the eurozone, the newspaper wrote.

Sunday's electoral result has strengthened Greece, but Tsipras will necessarily have to seek a compromise with the Troika, Carlo Altomonte, a professor of economics of European integration at Bocconi University in Milan, commented.

In a month's time, he noted, Greek depositors withdrew money from the banks worth nearly 20 billion euros, or around 15 percent of total deposits.

"This means Greek banks are surviving only thanks to the emergency liquidity funds provided by the ECB," he said.

In order to "avoid a default of the Greek banking system which would have dramatic consequences on citizens," Altomonte called on "the European Union (EU) to accept Greece's request for greater flexibility" and on Tsipras to "put aside the tones of electoral campaign" and "observe the agreements made." (1 euro = 1.13 U.S. dollars) Endit

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