Still no resolution in sight between Athens and EU officials

Tuesday, June 16, 2015

Tensions between Athens and eurozone lenders rose yesterday as it emerged that Greece had no plans to propose any fresh revisions as hopes of an amicable debt restructuring agreement and access to bailout funds continued to fade. Yanis Varoufakis, Greece’s finance minister commented to the press that any potential amendments and revisions would need to be evaluated in depth before being presented to eurozone finance ministers at a meeting in Luxembourg on Thursday which could cause further delays as the indebted nation tilts precariously on the edge of default. Eurozone stocks experienced heavy losses on Monday as ECB President Mario Draghi continued to express his concerns regarding the impending deadline and urged the Greek government to take necessary action and avoid further delay.

Alexis Tsipras offered a very different outlook to the current standoff as he accused creditors of giving Greece a raw deal since the financial crisis and put it to the country’s creditors to come up with an alternative plan to save them from default and the ever increasing likelihood of a Greek exit from the euro. Talks over the past few weeks to release the much needed €7.2bn bailout funds have failed to make any progress and with the IMF pulling out of negotiations last week an increasing number of EU officials are growing tired of the unwillingness to compromise. Unless significant progress can be made over the coming days and with neither side willing to offer any concessions we could see a significant run on eurozone equities as the robustness of the euro is undermined. Fund managers have already begun arranging credit lines in preparation for any substantial withdrawals with the bond market expected to bear the brunt of any large-scale sell-off. (Bloomberg timeline of key meetings and deadlines facing Greece:

Asian stocks followed Wall Street lower with mainland Chinese benchmark indices leading the way down as investors, spooked by the ongoing Greek debt standoff pulled out of risk assets in search of safer havens. Selling pressure was magnified by the growing speculation that the US Fed could increase interest rates as early as September after broadly positive US data releases last week, improving investors’ confidence. The FOMC will start their two day meeting later today with the rates decision due tomorrow and while rates are expected to remain unchanged investors are anxiously awaiting any further details on the outlook for interest rates from the accompanying statement.

ASE hits seven and a half week low

ASE Index Athens Stock Exchange 2015 06 16 07 53 47

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Topics: ECB, IMF, Greece
More from: Kash Kamal