Analyst: Greek crisis could divide eurozone

An analyst says the risk alone will shake the euro's confidence.

People withdraw cash from ATMs in central Athens on 19 June, 2015, as a beggar lays on the pavement. The European Central Banks decision-making governing council will hold an emergency session on June 19 to discuss a request from the Bank of Greece for an increase in liquidity to Greek banks. Picture: AFP.

JOHANNESBURG - Analysts are warning the Greek crisis could cause division in the eurozone for years to come despite agreement being reached allowing for a third bail out.

EU leaders emerged from all night talks Monday morning saying the eurozone would fund Greece over the next three years in an almost €86 billion loan.

Six measures including tax and pension reforms must be enacted by Wednesday and the entire package must be endorsed by parliament.

While the European commissions announced the risk of Greece leaving the eurozone had been averted, analyst Jens Nordvig, says the risk alone will shake the euro's confidence.

"The euro has lost its innocence, the idea that the euro was irrevocable is no longer there; this weekend it was openly discussed whether Greece should exist the euro or not."

He says Greece had no other option to accept the bailout as it was not in a financial position to back out of the eurozone as so many had called for.

"We are on a track to a deal because the Greeks have really have no other option. If they want to keep the euro they have to take this proposal. It's worth thinking ahead about what this means for the euro going forward."