European finance ministers' meeting on Feb 20: Greece back as a major concern

Further to the weekend news, there is a European finance ministers' meeting on Feb 20.

Key Quotes:

"It was hoped an agreement would be reached by that meeting. Such an agreement would be new Greek austerity measures for payment from the 86 bln euro 2015 package to ensure that government can make the seven bln euro payment due in July. If the agreement is elusive, which seems highly probable, then the situation looks frozen for at least three months. The Dutch parliamentary approval is necessary, and it will be dissolved ahead of the March election. The French election in April (and a likely second round in May) will also likely deter an agreement.

The underlying issue is the sustainability of Greece's debt. In an unusual development, the IMF executive board was split on the issue earlier this week. The European contingent argued that Greece's debt is sustainable and that the European commitment to Greece is what makes it a unique case. Other board members, including the US, China, Brazil, India and South Africa questioned the sustainability of Greece's debt and did not accept that a 3.5% primary budget surplus for years was realistic.

The IMF's position is important even though when the crisis first broke the ECB and Germany were not particularly keen for the involvement of the multilateral lender. Now Germany (and the Netherlands) insist on the IMF's participation as a condition for their continued support. At the same time, the IMF's assessment has increasing diverged from Germany's and the European Commission's (self-serving) assessment more broadly."

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.