How is this for déjà vu? Another debt crisis is to ferment Europe.
Greece needs European creditors to issue funds from an agreed rescue plan in 2015 in order to be able to pay debts, but officials in Logbress heads. Investors began to worry, demanding higher returns on Greek debts.
In addition to confusion is a warning from the International Monetary Fund that Greece’s debts are not sustainable and on the “explosive” path, an evaluation that prevents the fund from participating in the rescue process.
The timing can hardly be worse. European leaders have a lot on their plate. The elections waved on the horizon in the Netherlands, France and Germany. Britain’s exit negotiations from the European Union will begin within weeks.
However, the threat of Greece comes out of the euro requires attention. That is why the next few weeks will be the key:
Hammer
Greece is running out of cash, but it needs to be paid to creditors, including the European Central Bank. The main bills are coming in July.
If Greece is unable to make payments, it will fail to pay its debts and a cycle of the euro area.
Meanwhile, its last rescue plan – the third since 2010 – has been effectively frozen. The negotiating positions of the main players have been far apart at any time since the rescue plan was agreed in June 2015.
There is a dispute over the size of the problem facing Greece.
“The recent review by the International Monetary Fund for the Duns of Greece was amazingly pessimistic.” “It’s surprising because Greece is already working better than this report.”
I want everything
The International Monetary Fund, Greece and creditors led by Germany have completely different priorities. This is what each of them wants:
The International Monetary Fund called on Greece to make more ambitious changes to its economy, including labor market reforms. The International Monetary Fund did not join the third rescue when it was agreed for the first time in 2015 because it did not seen the debts of Greece as sustainable. It still emphasizes that Greece cannot be self -sustainable without a large relief from debt.
The main creditors in Greece agree that Athens must implement the reforms proposed by the International Monetary Fund. However, they categorically excluded any debt exemption, a position by the financial officials in the euro zone on Tuesday.
Meanwhile, Greek Prime Minister Alexis Tsipras does not show any sign of the return on the demands of additional reforms. He insists that the debt is needed before making any new concessions.
It is a classic confrontation and monitors investors to find out any party that is first.
Take out
The next main teacher is a meeting of the finance ministers in the eurozone on February 20 – another before the elections began to distort political waters in Europe. Agreeing will be more difficult for Greece as soon as voters start making their votes.
After that, the bills will start coming. Greece faces a boost to the European Central Bank about 1.4 billion euros in late April and another 4.1 billion euros in July.
High share.
The unemployment rate in Greece is expected to exceed 21 % in 2017. Investment has decreased by more than 60 %, and production has contracted by more than 25 % since the financial crisis. The social fabric in the country is embodied.
If European creditors reject more help, Greece’s debts will be out of control regardless of the speedy growth of its economy, according to the International Monetary Fund.
This will leave only one option – giving up the euro.
Ted Maluc, the expected choice of President Trump for the US Ambassador to the European Union, told Greek TV on Tuesday that the future of the eurozone will be determined in the next 18 months.
“Certainly there will be Europe, whether I survived the euro area, I think it is a large question on the agenda,” he said. “I think this time I would like to say that the possibilities are higher than that Greece itself will come out of the euro.”
CNNMoney (London) It was first published on February 8, 2017: 12:27 pm East time