jeudi 9 avril 2015
Don't be fooled by Greece making that IMF payment — the country is still marching into chaos
Posted on 11:52 by nice news
There was some mild relief on Thursday when Greece made its latest payment to the International Monetary Fund, with bond yields sliding. (Yield measures risk, so when they decline it suggests there's less risk of a default.)
That sort of reaction is a bit like having a celebratory drink because you've paid your electricity bill — it's probably not a good signal about your financial health.
Greece is currently negotiating a short-term bailout extension that it doesn't really want, offered by European institutions which don't trust the Greek government and approved by other governments that are running out of patience. That's the bottom line. Athens currently has until about April 15 to present a completed reform list to its creditors.
But even if Greece gets the bailout deal when European finance ministers meet on April 24 (which isn't assured), we'll be back in the same place in about two months. Then, the government isn't going to want another extension. It's going to want the major debt deal it promised to deliver when it won the election. If it does go back to the cycle of renewing bailouts, it's going to have problems with its own supporters and politicians.
Here's Dr. James Nixon, chief European economist at Oxford Economics, talking about one of Greek PM Alexis Tsipras' most recent speeches:
In remarks that must clearly put Greece on a collision course with its international lenders, he said that Greece had no interest in a third bailout or receiving more loans. What Greece wants he said, is a new contract for growth not another memorandum laden with austerity and argued that Greece’s official creditors had committed to start debt relief talks in June...
We see a smal
That sort of reaction is a bit like having a celebratory drink because you've paid your electricity bill — it's probably not a good signal about your financial health.
Greece is currently negotiating a short-term bailout extension that it doesn't really want, offered by European institutions which don't trust the Greek government and approved by other governments that are running out of patience. That's the bottom line. Athens currently has until about April 15 to present a completed reform list to its creditors.
But even if Greece gets the bailout deal when European finance ministers meet on April 24 (which isn't assured), we'll be back in the same place in about two months. Then, the government isn't going to want another extension. It's going to want the major debt deal it promised to deliver when it won the election. If it does go back to the cycle of renewing bailouts, it's going to have problems with its own supporters and politicians.
Here's Dr. James Nixon, chief European economist at Oxford Economics, talking about one of Greek PM Alexis Tsipras' most recent speeches:
In remarks that must clearly put Greece on a collision course with its international lenders, he said that Greece had no interest in a third bailout or receiving more loans. What Greece wants he said, is a new contract for growth not another memorandum laden with austerity and argued that Greece’s official creditors had committed to start debt relief talks in June...
We see a smal
Don't be fooled by Greece making that IMF payment — the country is still marching into chaos
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