Si ricomincia ? ! ? !
6th Aid Tranche to Greece at Stake
There is growing doubt about the release of the next aid tranche to Greece in September and the new loan. Greek FinMin Evangelos Venizelos admitted on Wednesday that the completion of negotiations is not expected sooner than late September, however he said that the extension of maturity (and value) of bonds beyond 2020 is possible.
The same applies to the role of the European rescue fund EFSF. The proposal is still under preparation by the European services and the approval by national parliaments has been postponed for next month.
Meanwhile, the crisis expands and publications for inability to support Greece were released again yesterday.
Under these conditions, Greece is likely to have to make do with the loan of €110 billion. However, the data in this view has also changed.
On the domestic front, facing large revenue shortfalls and delays in the implementation of the MoU, the government would attempt next week to convince the troika that it should receive the money.
It also has to address a new wave of social reactions, as the civil servants and taxi drivers have already announced protests, while fears have been expressed about an expansion of British turmoil.
On the external front, it is still unknown how many EU counties could contribute to the sixth aid tranche, given the contagion of the crisis. It is also unknown whether the IMF would participate given the constraints of its stature.
Analysts explain that the reactions of the EU political leaders in the coming days would be critical, estimating that if they let the crisis to drag by September, a new larger attack would occur on the markets.
Still, Greece could gain from a possible decision on coordinating policies, Eurobond, EFSF enhancing, but nothing is for granted.
Germany continues to oppose against the strengthening of EFSF, while Fitch downgrade Cyprus and fear of France’s downgrade leads to austerity measures.