Greek debt: markets waiting for a watered-down agreement

Greek Parthenon

Meanwhile deposits continue to flee the country (total deposit outflow data for March is expected later this month). Greek banks do not have much room for manoeuvre and tension is indeed being felt at european financial markets.

Not much is expected at the upcoming Eurogroup meeting on Friday, so May 11’s meeting is almost consider an ultimatum. On May 12, Greece has to make a third payment to the IMF amounting to €770bn (before May 1, the country has to pay €203 million and €1.6bn in June).

So what are the alternatives for Athens?

Basically four:

-A satisfactory agreement

– An in extremis, watered-down agreement to prevent sovereign default.

-A sovereign default, but not a banking default (extension of the emergency liquidity assistance ELA, which is more costly than borrowing from the European Central Bank) and establishment of capital controls.

– A Grexit after a banking and sovereign default.


We bet on the second option, although it would not solve Greece’s core problem,” experts at Spanish Financial Analists  Institute (AFI) commented on Tuesday. “We cannot rule out extreme scenarios.”

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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