Eurogroup Chief: Third Greek Bailout is Inevitable

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Dutch finance minister Jeroen Dijsselbloem said that Greece’s problems will not be solved in 2014, so “something more will have to happen”. He said a third package of aid will be inevitable.

Dijsselbloem joins similar words by his German colleague Wolfgang Schäuble, who also surprised with similar words, just one month before Germans go to the polls.

The finance minister talked to the daily Het Financieele Dagblad. Dijsselbloem is the head of the Eurogroup since early 2013.

Also the IMF sees a funding hole in Greece’s finances and expects European governments to take a loss on Greek loans. This is not favored by the German public, to say the least.

German elections

The SPD opposition party in Germany has blamed Chancellor Angela Merkel of not telling the truth about the situation in Greece, and this statement by the chief of the Eurogroup will serve as more ammunition towards the elections on September 22nd.

So far, news about Greece had a limited impact on the euro, but towards the elections, every worry about Merkel’s chancellery could have a bigger impact.

The elections in Germany are from a done deal: while a total shift from Right to Left seems to have low chances, small parties could crumble the majority that Merkel’s CDU / CSU / FDP coalition has. A “grand coalition” involving the big mainstream Right and Left is not the preferred choice.

Such news aids not only the SPD but also the new AfD party that wishes to break up the euro-zone. Some polls show that the party passes the 5% threshold and takes votes from Merkel, while other polls show that this party has limited powers. Also the Pirate Party is struggling to enter parliament.

The September 22nd elections will certainly be interesting.

Further reading:  Euro strength – how long will it last?

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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