Wednesday, February 11th, will see two Greece related events coming together in a potential showdown.
The two events are an extraordinary meeting of European finance ministers specifically focused on Greece, and the day in which the ECB’s waiver on Greek government bonds expires.
While we could get some kind of delay, or perhaps a very temporary bridge deal, political tension and market nervousness will like to reach one of its peaks.
The new Greek government is less than two weeks in power. At the beginning, we had nice words from both sides: Tsipras was willing to back down for his demand for a total debt forgiveness, and Juncker agreed to abolishing the troika.
However, the past week’s European tour of Greek finance minister Yanis Varoufakis didn’t go so well. He came out with a meeting with ECB president Mario Draghi saying it was “fruitful” only to hear late in the day that the ECB will no longer accept Greek bonds as collateral. This comes into effect on February 11th.
The following day, his meeting with his German counterpart Wolfgang SchÃ¤uble ended in a press conference in which disagreement was acrimonious.
So after the tour, also including Paris and London ended, there will be another event: on February 11th.
Will we see the sides going further away from each other? Some see the chances of a Grexit higher than in 2012.
However, this could all be part of the game: eventually, nobody wants a Grexit nor an Alexit, so while this is a high stakes game, the sides will eventually find a compromise.
What do you think?
In the meantime, EUR/USD is stable as markets await the US Non-Farm Payrolls.