The key issue regarding the Greek referendum on Sunday is who will lead the Greek government in the event that the vote is for more austerity, Charles Dallara said on Thursday.
“The finance minister said he will resign, the prime minister has signaled implicitly that he will unlikely remain in charge of the Greek government, at least not in his current form. A lot of uncertainty prevails,” he said in an interview with CNBC’s “Squawk on the Street.”
Dallara is vice chairman of Partners Group’s board of directors and the former managing director of the Institute of International Finance. “Whatever the outcome of a vote, I think the key issue here is who will be leading the Greek government at that time and that is very unclear,” he said.
Dallara said that Angela Merkel’s move to stop talks before the outcome of the referendum is actually a short-term tactical consideration. “It’s no secret that they [European leaders] have not found it a particularly pleasant or rewarding experience to work with the current Greek government.”
“I do think, however, the odds continue to be reasonably good that following this referendum, whatever the outcome, that there will be a resumption of negotiations and the odds of a deal during the course of the first three weeks in July are still not that low,” he said.
The vote is good
Robert Kimmitt, former U.S. deputy Treasury secretary, said that the vote is a good development because it allows the world to react to the voice of the Greek people.
“I think we have to recognize that politically European leaders now seem to trust the Greek voters more than they do the current Greek government. And therefore, we have to anticipate that anything that happens next week pivots off this vote both internally in Greece and more broadly in Europe,” he told CNBC’s “Squawk on the Street” Thursday.
Kimmitt said he believes that Greece’s future is stronger both in Europe and the euro zone. “I hope that’s where the Greek people come out.
