02 Jul Greece on the Brink
Voya Investment Management – Greece on the Brink
With negotiations between Greece and its troika of creditors — including the International Monetary Fund, European Central Bank and European Union — at an impasse, the country and the currency union to which it belongs are heading into unchartered waters. At this point, any number of outcomes seem possible, from a deal that secures additional bailout funds for the beleaguered nation to its so-called “Grexit” and return to the drachma.
After weeks of apparently fruitless negotiations — which you’ll recall followed a four-month extension granted to the country in March when that round of talks broke down —Greece’s current bailout package was set to expire on June 30, a date that coincided with a €1.55 billion payment due to the International Monetary Fund. With that deadline looming, representatives gathered in Brussels the weekend of June 27 and 28 for a last-ditch sit down, only to be blindsided by Greek Prime Minister Tsipras’ announcement of a July 5 referendum in which the Greek public will be asked to vote “yes” or “no” on the latest bailout proposal and its conditions. Tsipras at that time also requested of his creditors an extension of the country’s existing bailout, an appeal not surprisingly denied.