European leaders’ summit at Riga, didn’t provide any useful cues for market to take hint from. German Chancellor didn’t provide any updates or her views while going in or out of the summit. Her only words to reporters at the end of summit was “Goodnight”.
Market participants, tired of repetitive commentaries from Greek finance minister Yanis Varoufakis, who keeps saying a deal is very close and German counterpart Mr. Schäuble who scraps the idea, was looking for fresh perspective from the leaders.
Greece’s fate basically rests on the Trio, rather than two finance ministers.
- Greek Prime Minister Alexis Tsiparas – Mr. Tsiparas has the final call, whether his party stands ready to roll back some of his party promises and accept the reform agenda. As of now he in one hand is optimistic of a deal and defiant on others over some key reforms.
- German Chancellor Angela Merkel – German chancellor is key to the negotiation, with Germany as the single largest loan provider to Greece. As of now, she has given little for the market to chew on, held private meetings with Greek counterpart, attended leaders’ summit to discuss on Greece but little comments to take cue from.
- European Central Bank’s president Mario Draghi – Mario Draghi has remained defiant to Greek calls to remove cap on treasury borrowings and to place waiver back on Greek bonds as collaterals. He maintained his pledge that Greece need to reach a political agreement for ECB to provide further assistance. However latest increase of € 200 million to Greek ELA and bringing the sum to € 80.2 billion, shows that ECB has not given up on Greece.
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