Monday marks the end of discussions and a decision on bailout terms for Greece: Will the euro survive?
After last week’s confidence in the euro following Germany’s better than expected growth figures, Monday marks a turndown in the single currency as financial leaders meet to discuss the terms of engagement on Greece’s bailout from Troika.
EURUSD opened at 1.139, rising slightly to 1.142 but retracing by 10am GMT. The question is whether German statistics or Greek vulnerabilities will win out on determining the direction of the currency.
Greece is looking to raise funds from alternative methods rather than extend the bailout loan. February 28 is the deadline to pay the next tranche of debt but Yanis Varoufakis, the Greek finance minister alongside his 18 European counterparts, will have to determine whether this payment is postponed till June when a Greek bond €3.5bn is due, or for the Greek’s to accept €7.2bn in immediate aid plus a 6 month extension.
Varoufakis has proposed funding from a variety of sources including borrowing from Treasury bills, profits from Greek bond and the Greek bank recapitalization fund. However, the European Central Bank has halted all of these proposals under non-approval and current bailout prohibitions.
There are hardliners on both sides of Monday’s discussion table with Greece sticking to its plan to slowdown the country’s privatization programme and those in the EU looking to Greece to fulfill its obligations. European Commission president, Jean-Claude Juncker was reported on FRANCE 24 news channel as saying, “Structural reform is of paramount importance. I would like to invite Greece to step away from taking unilateral measures. The measures, and all new measures, have to be taken in agreement with the Eurogroup. But as far as the final result is concerned, the amounts [of Greek repayments] have to be exactly the same.”
MT4 chart: EURUSD
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