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Greece on hold until referendum on Sunday
Markets are calm despite the elevated risk from the Greek debt crisis. For now most investors prefer to wait on the next developments, and focus is on Sunday’s referendum. Greece’s failure to meet the deadline on its IMF payment looks to have been fully anticipated by markets.
Prime Minister Alexis Tsipras announced last weekend that he would put a deal proposal by Greece’s international creditors to a referendum on Sunday, July 5, and urged a “No” vote. But European officials and Greek opposition parties have warned that a “No” vote on Sunday will mean Greece will leave the euro and possibly even the European Union.
Greece’s government has made new concessions in talks with its creditors. Prime Minister Alexis Tsipras sent a letter Tuesday night, just hours before the country’s bailout program was due to expire, saying his government was prepared to accept creditors’ proposals made last weekend, subject to certain amendments. Some European officials said they were still not good enough and that a deal was nevertheless impossible before a Greek referendum on Sunday.
The creditors did not accept Greece’s new offer, which resulted in the expiration of the bailout program and the European Central Bank capping the emergency liquidity assistance. Consequently capital controls were imposed and banks were closed.
Eurozone finance ministers met on Wednesday to discuss the terms but no deal was reached.
But German Finance Minister Wolfgang Schaeuble was clear that no deal was imminent before the referendum on the creditors’ proposals on Sunday.
“Before a referendum, there is indeed no basis (for an agreement),” Schaeuble said.
The post Greece on hold until referendum on Sunday appeared first on Forex Circles.
