There is a lot of talk on the wires
this morning about the perceived imminence of a Greek default on its payments
to its creditors, most notably the IMF. €1.5 billion is due for repayment in
June, and considering that the only way that a mere €750 million could be
catered for recently was to raid a reserve fund that was already on deposit
with the IMF, the prospects of making this hurdle look increasingly slim. The
brinkmanship that has characterised the new government of Mr. Tsipras, and
indeed the attitude of the EU itself over the crisis, seems to coming to a
head. It will either be a case of “The darkest hour being just before the dawn”,
or we really will see a default.
Greece
at make or break
In the meantime Greek two-year bonds
have now reached a yield of 23.68%. This is nosebleed territory and reminiscent
of the worst days of the Euro crisis.
Over in the IMF, a leaked memo, publicised
by Channel 4 in the UK, has staff stating that “there will be no possibility
for the Greek authorities to repay the whole amount [in June] unless agreement is
reached with international partners”.
Crunch time is coming. In the meantime
the markets just hate uncertainty and this bout of it is bound to affect the
Euro against its major counterparts.
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