ECB QE could include Greek bonds soon - BBH

According to analysts from Brown Brother Harriman, the European Central Bank could include during the first quarter of 2017, Greek bonds in its purchase program. 

Key Quotes: 

“The ECB does not include Greek bonds in its sovereign bond purchase operation. However, the progress is being made, and it is possible that starting early next year, the ECB will buy Greek bonds.”

“Greece Deputy Finance Minister Chouliarakis told the EU Parliament that a staff-level agreement is possible before the end of the year.  There are two challenging issues:  labor market reforms and primary budget target. “ 

“Reforms in the labor market include collective bargaining and dismissals, as well as n industrial action rules.   Collective bargaining reportedly broke down after the 2012 reforms.  That said, Greece's largest unions have called a general strike for Thursday to protest the tax hikes and labor reforms.”

“The ECB  already accepts Greek bonds as collateral for loans to Greek banks.  It also has bought EFSF bonds from Greek banks under the asset purchase program.  Buying Greek bonds is an incremental step.  The amounts will be small.  It ought not to be surprising if the ECB includes Greek bonds by late Q1 17.”