Greece Is The Word II

The story continues……

 

European officials and Governments are growing more anxious by the day about the Greek drama.

 

The new radical-left Greek government said it would no longer negotiate with the officials from Troika - the International Monetary Fund (IMF), the European Union (EU) and the European Central Bank (ECB). That did not go down well with European officials and nerves have been left frayed.

 

Greece's Government also said it would refuse new loans from the EU and the IMF. That raised the question of how it would finance itself and created concerns that Athens was no longer sticking to the terms of its bailout agreement.

 

What a mess.

 

In short, Greece wants to write off some / all of its unsustainable debt that was restructured as part of the bailout, with the Eurozone unwilling to budge. The result……a tense political thriller.

 

The Greek Finance Minister is now on a charm offensive around Europe flirting with various Governments in an effort to gain support and allies for Greek restructuring of its unmanageable debt.

 

What can we expect the thrilling climax to be?

 

The most likely outcome will be both the Eurozone and Greece meeting somewhere in the middle and any default by Greece is managed in an organised ‘hair cut’ (you’ll be sick of this expression by Easter).  

 

Expect plenty of newspaper copy on the worst case scenario though……Greece refusing to repay any debt and investment markets going into meltdown. It will spark political unrest in Spain / Ireland / Portugal / Italy as they consider the merits of not repaying their financial support from the Eurozone as well.

 

What is also at stake here is not just the fate of Greece and whether it stays in the Eurozone, but the authority of Germany to define the narrative in Europe and in the Eurozone. The German’s are ruffled.

 

There is urgency to these talks though. Greece's bailout agreement expires on 28 February 2015. If it is not extended, the European Central Bank would have to stop lending Greece money. Also, Athens would not get €7.2 billion, the next tranche of bailout money without a review of its reform programme being completed. Expect it to go right to the wire.

 

Gripping. Intense. Thrilling.

 

Political and economic drama at its best.