26 May 2015
Festering situation in Greece – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team comments on the worsening Greece crisis, with concerns looming whether the Greeks will be able to make a payment to the IMF next week.
Key Quotes
“Greece's payment to the IMF next week is in question. Of course, this is not the first time the Syriza government has suggested it would not make a debt payment, which it later made. However, given the large payments due next month, and the fact that the last payment was made by tapping an emergency fund at the IMF itself, there is a sense that the long elusive brink is near.”
“There is a maneuver by which Greece could bundle the various payments to the IMF into one payment and buy a little time, but it needs to formally request permission from the IMF, and it has not done so, nor would the IMF necessarily accede to this. Prime Minister Tsipras has reportedly called an emergency meeting with the Greek negotiating team.”
“Greek bonds have been crushed, but the stock market is bucking the regional trend and posting minor gains.”
“Most investors and policy makers have little sympathy for the Syriza government. However, it must remembered that the official creditors cut off aid payments to the previous government almost a year ago, which may have helped fuel the election outcome in the first place. It is now fairly well documented that the initial aid packages were not designed to put Greece on a more sound and competitive path as much as to build a firewall to avoid the contagion.”
Key Quotes
“Greece's payment to the IMF next week is in question. Of course, this is not the first time the Syriza government has suggested it would not make a debt payment, which it later made. However, given the large payments due next month, and the fact that the last payment was made by tapping an emergency fund at the IMF itself, there is a sense that the long elusive brink is near.”
“There is a maneuver by which Greece could bundle the various payments to the IMF into one payment and buy a little time, but it needs to formally request permission from the IMF, and it has not done so, nor would the IMF necessarily accede to this. Prime Minister Tsipras has reportedly called an emergency meeting with the Greek negotiating team.”
“Greek bonds have been crushed, but the stock market is bucking the regional trend and posting minor gains.”
“Most investors and policy makers have little sympathy for the Syriza government. However, it must remembered that the official creditors cut off aid payments to the previous government almost a year ago, which may have helped fuel the election outcome in the first place. It is now fairly well documented that the initial aid packages were not designed to put Greece on a more sound and competitive path as much as to build a firewall to avoid the contagion.”