Research Team at RBC Capital Markets, suggests that next week’s monthly meeting of euro area finance ministers will be dominated by Greece.
Key Quotes
“On Sunday the Greek parliament is scheduled to vote on a package of tax increases and reform measures. Alongside, there will also be a vote on the contentious contingency measures that the Greek authorities have been asked to draw up for deployment in the event that its 2018 budget misses targets and which have held up completion of the latest review.
Assuming that those measures are acceptable, the expectation is that euro group will sanction the dispersal of c.€10bn in programme funds which would allow Greece to meet forthcoming debt repayments and clear arrears which have built up as the review has dragged on. The meeting will also discuss Greek debt relief as the euro area looks to bridge the gap between it and the IMF on the sustainability of Greece’s debt and allow the IMF to participate in the latest programme (a prerequisite for some euro area governments, notably Germany, Finland and the Netherlands).
Ministers will discuss options that have been worked up since the last meeting two weeks ago and although final agreement may not be forthcoming on Tuesday we expect that they will signal a definite direction of travel to enable the IMF to come on board.”
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