8 May 2015
Eurogroup meeting preview: Failure to progress on Greece risks capital controls – TDS
FXStreet (Barcelona) - The TD Securities Team previews the Eurogroup meeting scheduled to take place on Monday, 11th of May, and notes that Greece will remain to be the key topic for discussion.
Key Quotes
“Greece will be the main topic of discussion here, as its funding talks come down to the wire. The most recent speculation is that Greece has managed to cobble together the cash that it needs to make the €750mn payment to the IMF on the 12th, so this isn’t the do-or-die meeting that it appeared to be earlier. But a failure to at least make significant progress at this Eurogroup meeting raises the risk that the ECB hikes up the haircuts on Greek capital, which would likely lead to serious funding issues for banks and capital controls.”
“Syriza is expected to meet over the weekend discuss its so-called red lines and the idea of a referendum on whatever deal is eventually reached with the Brussels Group. A referendum though may also lead to the need for capital controls, given that it would further delay the release of any funding to Greece, and time is quickly running out.”
“So as these negotiations drag on, we seem to be heading down a road where it’s becoming increasingly difficult to avoid capital controls, and where Greece will be pushed to the brink before a solution is finally reached.”
Key Quotes
“Greece will be the main topic of discussion here, as its funding talks come down to the wire. The most recent speculation is that Greece has managed to cobble together the cash that it needs to make the €750mn payment to the IMF on the 12th, so this isn’t the do-or-die meeting that it appeared to be earlier. But a failure to at least make significant progress at this Eurogroup meeting raises the risk that the ECB hikes up the haircuts on Greek capital, which would likely lead to serious funding issues for banks and capital controls.”
“Syriza is expected to meet over the weekend discuss its so-called red lines and the idea of a referendum on whatever deal is eventually reached with the Brussels Group. A referendum though may also lead to the need for capital controls, given that it would further delay the release of any funding to Greece, and time is quickly running out.”
“So as these negotiations drag on, we seem to be heading down a road where it’s becoming increasingly difficult to avoid capital controls, and where Greece will be pushed to the brink before a solution is finally reached.”