There Is No Market Panic Over Greece, Yet
Hans Olson, of Barclays, asked, “What if you gave a crisis and nobody panicked?
Look at CDS spreads, or yields, the VIX, markets; nothing there he said.
He went on to say that in all the discussion of reforms, such as in Greece’s pensions or VAT, what they are not talking about is Greek state asset sales, referring to the Hellenic Republic Development Fund, which was put together 5 years ago to privatize assets.
And out of about 8,000 deals they have seen or considered, they (the Greeks) only completed 40 and only received 3-B GBP in cash, which would be 1% of the debt.
Mr. Olson recounted that when he called the Fund in Athens to ask a followup question on a presentation, they refused to respond without the submission of a written form. Mr. Olson concluded, “I think that’s what we’re dealing with.” Meaning, no interest in privatizing state assets.
The socialists Greeks want it all their way,
Greece’s creditors offered to unlock aid of as much as $17.3-B for the struggling debt ridden country, as Prime Minister Alexis Tsipras railed against the tough conditions demanded in return for the deal.
With Greece’s bailout set to expire next Tuesday, creditors have proposed a 5-month extension through November, a European official said Friday. The proposal, which was presented to a Euroarea finance ministers meeting in Brussels Thursday, is dependent upon the Greek government committing to so-called prior actions to implement economic measures. Meaning that Greece has not lived up to its responsibilities vis-a-vis the previous bailout.
Finance chiefs will meet again Saturday to try and hammer out agreement on those steps, with sticking points including VAT (sales-tax rates) and pension reform.
At a meeting Friday, Mr. Tsipras told German Chancellor Angela Merkel and French President Francois Hollande that his government cannot understand why the country’s creditors insisted on harsh austerity measures.
Whatever the package, it must be very difficult for Greece’s prime minister to sell it to his party and Parliament.
Have a terrific weekend.
HeffX-LTN
Paul Ebeling
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