20 Feb 2015
The European ‘game of chicken’ could continue into next week – Rabobank
FXStreet (Barcelona) - The Rabobank Team comments that with Germany rejecting Greece’s loan extension proposal, and Eurogroup hardening its stance over the Greek’s, the discussions could continue well into this weekend and into next week.
Key Quotes
“In the latest episode of the soap opera that is called Greece, the Greek government has requested the Eurogroup to extend the original EFSF bailout by six months. Such a move was already widely expected yesterday, and markets responded positively.”
“However, the optimism was short-lived and gains faded after a quick response from Germany. The German finance ministry publicly rejected the Greek request, because it was “not a substantial solution” and it did not meet the criteria set out by the Eurogroup on Monday. This rapid response from Berlin was a result of the quickly evaporating trust between Germany and Greece.”
“This now sees the Germans read into some vague statements in the Greek request as if they are “Trojan horses” through which Athens will ultimately manage to unilaterally wiggle itself out of parts of the agreement after the funds have been promised.”
“This is not to say that the Greek request was made in vain, since Eurogroup president Dijsselbloem did convene the Eurogroup for a new meeting, to be held this afternoon.”
“The language from the Eurogroup seems to be hardening, though. Therefore it remains to be seen whether the eurozone’s finance ministers will arrive at a deal today, and this European ‘game of chicken’ could very well continue over the weekend and into next week.”
Key Quotes
“In the latest episode of the soap opera that is called Greece, the Greek government has requested the Eurogroup to extend the original EFSF bailout by six months. Such a move was already widely expected yesterday, and markets responded positively.”
“However, the optimism was short-lived and gains faded after a quick response from Germany. The German finance ministry publicly rejected the Greek request, because it was “not a substantial solution” and it did not meet the criteria set out by the Eurogroup on Monday. This rapid response from Berlin was a result of the quickly evaporating trust between Germany and Greece.”
“This now sees the Germans read into some vague statements in the Greek request as if they are “Trojan horses” through which Athens will ultimately manage to unilaterally wiggle itself out of parts of the agreement after the funds have been promised.”
“This is not to say that the Greek request was made in vain, since Eurogroup president Dijsselbloem did convene the Eurogroup for a new meeting, to be held this afternoon.”
“The language from the Eurogroup seems to be hardening, though. Therefore it remains to be seen whether the eurozone’s finance ministers will arrive at a deal today, and this European ‘game of chicken’ could very well continue over the weekend and into next week.”