13 Jul 2015
Greece July 20 ECB payment risk - Scotiabank
FXStreet (Guatemala) - Eric Theoret, CFA, CMT Currency Strategist at Scotiabank explained that the weekend negotiations have resulted in an ‘a greement in principle’.
Key Quotes:
"With Greece expected to legislate tax, pension, governance, and fiscal reform measures by Wednesday July 15 in order to pave the way for discussions toward a new financing programme estimated to range between €82-86bn.
The IMF is to remain involved, and the new programme would be expected to include additional energy and labor market reform as well as a €50bn fund financed by privatization of state assets (of which €25bn would go to banking sector recapitalization). While near-term Grexit risk has faded, banks remain closed and ELA has been left unchanged since late June.
Greece’s July 20 ECB payment is the most important near term risk, as market participants consider the tight schedule and need for various countries’ parliamentary approval for a fresh disbursement of funds. Nominal debt haircuts are off the table, and discussions surrounding a possible reprofiling have been pushed off to a later date."
Key Quotes:
"With Greece expected to legislate tax, pension, governance, and fiscal reform measures by Wednesday July 15 in order to pave the way for discussions toward a new financing programme estimated to range between €82-86bn.
The IMF is to remain involved, and the new programme would be expected to include additional energy and labor market reform as well as a €50bn fund financed by privatization of state assets (of which €25bn would go to banking sector recapitalization). While near-term Grexit risk has faded, banks remain closed and ELA has been left unchanged since late June.
Greece’s July 20 ECB payment is the most important near term risk, as market participants consider the tight schedule and need for various countries’ parliamentary approval for a fresh disbursement of funds. Nominal debt haircuts are off the table, and discussions surrounding a possible reprofiling have been pushed off to a later date."