Things are beginning to move quite rapidly with urgent negotiations between Athens and Brussels as we have less than 9 hours until Greece is expected to miss its payment to the IMF. It’s still unclear if Tsipras will fly to Brussels, but details are beginning to emerge.
EUR/USD is reacting positively and recovering from the earlier lows. Updates:
Analysis: Greek proposal makes sense, but probably unacceptable for Germany
- The basis for the talks is an offer from EC president Juncker which was initially rejected and then reconsidered by Greece..
- Greek PM Alexis Tsipras has reportedly asked for a 3 month bailout extension.
- Update: Now the talk is about a 2 year bailout from the ESM. The short term offer on Friday (only 5 months) caused shorts on the euro.
- In theory, the German parliament would have to approve a bailout extension, but there may be a way around it.
- A deal will include a clear reference about debt restructuring. This was always a sticking point: the IMF and the US wanted debt forgiveness, something that was unacceptable for Germany.
- German finance minister took a different line regarding the referendum: contrary to many leaders, Schaeuble said that Greece could remain in the euro-zone even if they vote NO in the Greferendum.
- The head of the Eurogroup, Dutch finance minister Dijsselloem has cancelled a TV interview due to urgent obligations.
- Also Greece has cancelled a press briefing due to an urgent cabinet meeting.
- Earlier, Greek finance minister Varoufakis expressed optimism after talking about going to court if Greece is forced out.
Greek crisis – all the updates in one place
EUR/USD had already fallen to a low of 1.1133 earlier in the day and the peak so far today was 1.1242. It’s important to remember that responses to Greek news have not always been straightforward.
