Tag Archive: Greece Debt

  1. Greece Debt Talks – From Danger to Safety

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    Greece Debt Talks – From Danger to Safety – How did we get here?


    With Monday morning comes more news about Greece. This time it isn’t news of an ever-impending grexit but actually that “There will not be a ‘Grexit'” (European Commission head Jean-Claude Juncker). It appears this weekend that other than the intrigue of Roger Federer versus Novak Djokovic, the Eurozone leaders reached an agreement in their summit. This weekend after multiple weeks of uncertainty and bad press, it would appear that we may finally be heading towards a modicum of stability, let alone sanity.
    Greece Debt Talks Fruitful

    Greece debt talks finally pay dividends


    This weekend, the Eurozone finally agreed a third bailout package for Greece worth over €80bn. The first instalment of money will be €10bn to recapitalise the saturated Greek banks. The only caveat applicable to this new round of bailout (other than interest rates), is that the Greek parliament will have to pass the proposed reforms by the 15th July – this Wednesday. The reforms will affect VAT, pensions and the establishment of an independent office of statistics. If the Greeks comply with the reforms, they will also benefit from debt restructuring, allowing them to renegotiate its delinquent debts, making repayment easier.

    The long term outcome from this batch of Greece Debt Talks is yet to be seen, especially as the Greek people were already against austerity and these reforms are yet more of the same. In the short term, it finally displays a willingness of the new Greek Finance Minister to work with the Eurozone and flesh out a reasonable outcome to the never-ending Greek tragedy. It also shows how key players, such as Juncker (European Commission President), Merkel and Hollande are, behind the not-very-subtle game of smoke mirrors, very much dependent on Greece staying in the Euro and keeping the Eurozone going. No doubt the current outcome from the Greece Debt Talks will be received with much relief. The markets so far today have all reacted positively.

    Verdict:- Greece Debt Talks seem to have put an end to the calls for ‘Grexit’. If one thing has been learned, you cannot dampen domestic politics – if the Greek people rear their heads, the debt talks will count for nothing. Wait and See.

    Click here for Greece Debt Talks: Live Update

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    Article by Michael Cooper

    email:-michaelc@atsbullion.com

     

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  2. Default: So what now for Greece?

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    Default: What now for Greece?

    Yesterday at 22:00 (GMT) Greece officially defaulted after failing to pay €1.5bn (£1.1bn, $1.7bn) to the IMF.

    This came after a frantic and late request to extend the bailout, which was subsequently refused. Unsurprisingly Greece are the first country to fail to repay the IMF, meaning they are now technically in default. Default being the failure to repay a loan at an agreed and specified time.

    So what next for Greece?

    Default for Greece has been on the cards for a while now, but what does this mean for Greece and Europe? Here are the key dates to watch out for:

    1st July – ECB officials will meet to discuss granting Greece an emergency loan package.

    5th July – Greek Referendum on the Creditor’s proposals will take place.

    10th July – Payment of Short Term Treasury Bills due (€2bn)

    20th July – Payment of ECB Loan (€3.5bn): comprised of bonds held by the ECB & the national central banks from 2012.

    Out of the dates above, the most important date to look out for will be Sunday’s referendum. The Greek populace will be asked to approve or reject the creditor’s most recent terms laid out in it’s deal:

    Greek Default: Vote Sunday

    Greek Referendum on Sunday

    “Should the agreement plan submitted by the European Commission, European Central Bank and the International Monetary Fund to the June 25 eurogroup and consisting of two parts, which form their single proposal, be accepted? The first document is titled ‘Reforms for the completion of the Current Program and Beyond’ and the second ‘Preliminary Debt Sustainability Analysis’.
    “Not approved/NO
    “Approved/YES”

    I think you’ll agree, for anyone who hasn’t got a degree in Economics or a strong grasp on the Greek Debt crisis, the lay person is going to have a job to know what that is asking of them. The BBC have an excellent article on this: “The Greek referendum question makes (almost) no sense”. For an explanation on the Greek Crisis and default, view our article: Greek Debt Crisis Explained: Top 5 things to know and key dates.

    Verdict:-Sunday’s vote will determine what will happen to Greece. If they vote no, Greece will almost certainly be heading for the Grexit. If they vote yes, it wouldn’t be unsurprising to see the Greek Government do a U-Turn and a lot of the faces (Tsipras & Varoufakis) currently in the Greek Government will be ousted. Greece, as they have been for much of this year and last year, are at the centre of European economics. Roll on Sunday.

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    Article by Michael Cooper

    email:-michaelc@atsbullion.com

     

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  3. Greek Debt Crisis Explained: Top 5 things to know and key dates

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    Greek Debt Crisis Explained: Top 5 things to know and key dates


    I cannot remember the last time I didn’t write about Greece. The more the year goes on, the more and more Greece dominates the financial news. For those of you who are finding the time to read up about it, well done. For those of you who have begun to lose interest and patience (along with the fulcrum of the IMF), never fear, I’m going to quickly reiterate all the vital stats and most importantly the key dates coming up. So onto the Greek Debt Crisis Explained:

    1) Greece’s Debt Crisis in Numbers
  4. Greece owe a whopping €320 Bn with €240 Bn coming from European Bailout.
  5. Currently, Greece’s debt to GDP (Gross Domestic Product) is currently at approximately 177%. Since 2010, GDP has fallen nearly 25% & Greek unemployment stands at around 26%.
  6. Greek Public Debt Graphic

    2) Greek Debt Crisis Explained: June, July & August
  7. In June Greece owe €6.74 Bn : 1.5 Bn to the IMF & 5.2 Bn in Short Term Bills
  8. In July Greece owe €5.95 Bn : 452 m to the IMF, 2 Bn in Short Term Bills, 3.5 Bn to the ECB
  9. In August Greece owe €4.38 Bn: 176 m to the IMF, 1 Bn n Short Term Bills, 3.2 Bn to the ECB
  10. 3) Tsipras Rhetoric

    Tsipras has backed himself into an ever shrinking corner. He was elected as a combatant to the austerity measures and he hasn’t shied away from playing the political game on a grand scale. Over the last few weeks he has begun to strike harder at the IMF, ECB and pretty much any of the creditors. Recently, after talks failed in Brussles he told creditors to get “realistic” about the cuts and mounting debt facing Greece.

    “We will patiently wait until creditors turn to realism. We have no right to bury the European democracy in the land where it was born.”

    4) Greek Debt Crisis Explained: Key Dates
  11. 16th/17th June: ECB to have an emergency meeting to discuss support for Greek banks in the event of a default
  12. 18th June: Eurozone ministers meeting – Deadline to reach a deal
  13. 30th June: European bailout for Greece ends & deadline for Greek €1.5bn debt repayment to the IMF
  14. For more information, view this graphic designed by the Wall Street Journal of Greece’s Debt Due in 2015.

    5) What is Default and Why Should we Fear it?

    In essence defaulting is the failure to pay interest or the principal due on a certain date. In simple terms, it is a failure to make the legal obligation of debt repayment. By defaulting on a repayment as an individual, your credit rating is likely to depreciate making future lending either impossible or very expensive. You may even run the risk of bailiffs and court orders, who may freeze assets and claim them as partial payment. For a country it is unknown how the international community and its creditors would try to reclaim the money owed.

    Default ought to be feared. It is the unknown. It has already been causing great uncertainty in the financial markets. If Greece default, it is a mere confirmation that non-existent paper money is exactly that: just inconsequential numbers on a screen. Like playing the computer game Sims or Civilization, with the cheats on. Except this is real life and a hell of lot of reality is at stake. Livelihoods and the potential onset of another recession is that reality.

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    Article by Michael Cooper

    email:-michaelc@atsbullion.com

     

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