After talks on Saturday broke up, the Eurogroup meetings are going on for a second day and so far, a lot of confrontations are surfacing. An agreement does not seem to be in sight. It seems that Germany has overplayed its hand at the moment. The EU Summit has been cancelled, allowing for euro-zone leaders more time to discuss the issues.
At the moment, optimism is low and stock futures already point to lower ground.. But doesn’t Europe always does the right thing at the last minute? Here are the latest updates on Schäuble’s confrontations:
Update: Greek deal reached – EUR/USD doesn’t buy it
- On trust: The head of the Eurogroup Dijesselbloem said there is a problem of trust with Greece. However, we also learned that German finance minister Woflgang Schäuble was striving to push Greece out. So who isn’t negotiating with good will?
- With France on tying to mediate: According to reports, France tried to mediate and help Greece make proposals that will be approved. French president Hollande also said Greece’s proposals are credible, and that gave EUR/USD a boost on Friday. Now we hear that Merkel is frustrated with the French role.
- With Italy on Greek proposals: Italy’s Prime Minister Renzi will reportedly tell Germany to accept the Greek proposals (which consist of a total surrender in terms of austerity, but also include debt restructuring). This comes as some euro-zone ministers demand more from Greece. Do you they want Greece to promise things it will be unable to implement?
- Even with the ECB: President Mario Draghi remained quiet during this period. He will speak anyway in the Bank’s rate decision on Thursday. In the meantime, he was snuffed by Schäuble, who said “don’t talk to me like a fool”. This happened after Schäuble said (once again) that a debt deal is not in the rulebook and Draghi reminded him that it already happened. The ECB holds the real keys to a Grexit.
On the upside, negotiations are still going on, and as aforementioned, a deal is always within reach. Given the optimism on Friday, a deal is likely priced in, so a failure would lead to another big gap lower on EUR/USD, while a deal would likely lead to a short-lived and limited rally.
Greek crisis – all the updates
In our latest podcast we clarify Greece and also China, oil, AUD and more:
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