17 Feb 2015
Greece: A solution to come at the 11th hour? - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained that while expectations of an agreement between Europe and Greece were already low, talks between the European leaders were cut short much earlier than expected after Greece rejected a draft statement.
Key Quotes:
"The fact that the talks were not continued after this appears to signal that the gap between the two parties is still much akin to a political Grand Canyon. Reports also indicate that there is a wedge between the EC (with Economic Commissioner Moscovici allegedly having presented a four month extension plan that Varoufakis was willing to sign) and the Eurogroup, with the latter taking a much harder stance vis-à-vis its Greek counterpart."
"As a result, EUR/USD took a plunge, losing about a cent to reach a low of 1.1320 before rebounding slightly. The currency currently trades around 1.1350."
"A large part of the differences between the two sides still seems to revolve around a Greek demand for a bridge loan so that the country can renegotiate the agreements made with its creditors."
"The Eurogroup –reluctant to create a bridge across such a vast distance– meanwhile stuck to its offer of extending the programme currently in place, while head of the Eurogroup Dijsselbloem called upon Greece to “honour its obligations”. Another way to interpret the abrupt end to yesterday’s meeting is that both Greece and Europe are taking as tough a stance as possible for as long as possible, so that any deal can ultimately be sold to the electorate."
"Indeed, a part of the discussion continues to revolve around semantics and whether to call any accord an “extension” or a “bridge loan”. Greece is asking for the latter to distinguish it from the current programme, and to give the country room to negotiate a different deal."
"Following the early end to yesterday’s talks, both parties have indicated that they are willing to return to the table. We still expect a solution to be found, but only at the eleventh hour."
Key Quotes:
"The fact that the talks were not continued after this appears to signal that the gap between the two parties is still much akin to a political Grand Canyon. Reports also indicate that there is a wedge between the EC (with Economic Commissioner Moscovici allegedly having presented a four month extension plan that Varoufakis was willing to sign) and the Eurogroup, with the latter taking a much harder stance vis-à-vis its Greek counterpart."
"As a result, EUR/USD took a plunge, losing about a cent to reach a low of 1.1320 before rebounding slightly. The currency currently trades around 1.1350."
"A large part of the differences between the two sides still seems to revolve around a Greek demand for a bridge loan so that the country can renegotiate the agreements made with its creditors."
"The Eurogroup –reluctant to create a bridge across such a vast distance– meanwhile stuck to its offer of extending the programme currently in place, while head of the Eurogroup Dijsselbloem called upon Greece to “honour its obligations”. Another way to interpret the abrupt end to yesterday’s meeting is that both Greece and Europe are taking as tough a stance as possible for as long as possible, so that any deal can ultimately be sold to the electorate."
"Indeed, a part of the discussion continues to revolve around semantics and whether to call any accord an “extension” or a “bridge loan”. Greece is asking for the latter to distinguish it from the current programme, and to give the country room to negotiate a different deal."
"Following the early end to yesterday’s talks, both parties have indicated that they are willing to return to the table. We still expect a solution to be found, but only at the eleventh hour."