FXStreet (Barcelona) – Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, shares the key developments revolving around the Greece bailout negotiations.
Key Quotes
“Greek negotiators reportedly left the European Commission only 45 minutes after entering. European Commission President Juncker had called the talks as the “last attempt” to reach a compromise agreement.”
“After the break down of the talks the European Commission stated that “while some progress was made, the talks did not succeed as there remains a significant gap” between the sides amounting up to EUR2.0 billion per year. They concluded that as there was no longer time to reach a “positive assessment” of Greek efforts, further discussion will now have to take place at this week’s Eurogroup meeting which is seen by many officials as the last chance for Greece to secure an agreement on a list of economic reforms required to secure short-term financing.”
“The FT is reporting that without an endorsement from its bail out monitors, the prospects of an amicable agreement on Thursday is remote, which raises the prospect that euro-zone negotiators may resort to the ”take it or leave it” strategy used on Cyprus at Eurogroup meeting two years ago. On that occasion an ECB representative warned that without a deal, it would be forced to cut all emergency financing to Cypriot banks.”
“Greek Deputy Prime Minister Dragasakis who is head of the negotiating team in Brussels has stated that Greece is “ready” to complete negotiations and blamed its creditors for being intransigent in their insistence on pension cuts and increases in the country’s value added tax. In an interview with the German Bild newspaper Greek Finance Minister Varoufakis has stated that Greece would forgo further aid if international creditors were to offer a debt cut calling for an extension of debt maturities. He also ruled out a Grexit as a “sensible solution” but added that “nobody can rule out everything.”
“In contrast, German Vice Chancellor and Economy Minister Gabriel has written in an op-ed article in today’s Bild that “the shadow of a Greek exit from the euro-zone is becoming increasingly perceptible” and warned that “Greece’s game theorists are gambling the future of their country. And Europe’s too”.”
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