Advertisement

Greece: deal or no deal?

Hopes for a last-minute deal for Greece are receding after a meeting of finance ministers failed to make headway.

15-6-25-Stubb-634
Finnish finance minister Alexander Stubb is losing patience

As European finance ministers gathered for their latest emergency summit this week, Finland's Alexander Stubb reportedly complained they were all wasting air miles over Greece's negotiations. Sure enough, by the time MoneyWeek went to press, hope for a last-minute deal was receding again.

Greece's latest proposals, presented on Monday, were deemed insufficient by creditors, while Greece rejected their counter offers. Greece needs a deal, and approval for it from both the Athens and Berlin parliaments, before the current bailout expires next Tuesday. Greece would also be in default on an International Monetary Fund payment after that day.

What the commentators said

On pensions, where Greece refuses to contemplate cuts in benefits, it at least suggested raising the retirement age and contributions. Still, creditors continued to insist on cutting pension benefits and want a tax on businesses reduced.

Advertisement - Article continues below

Early this week we saw "an improvement on mutual hostility", as The Guardian's Nils Pratley put it, but not a great one. In any case, with the focus on securing the last tranche of rescue package aid, people are forgetting the wider context. Greece's public debt is still a ridiculous 180% of GDP. For Greece to have any hope of getting its debt under long-term control, analysts reckon up to half needs to be written off.

But that's not on the table, said Pratley and neither is nibbling away at it by postponing repayment dates and tweaking interest rates. So the Greek crisis is still miles from being resolved. Indeed, it is barely being managed.

Advertisement
Advertisement

Recommended

Visit/519858/how-long-can-the-good-times-roll
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Visit/economy/eu-economy/601463/why-a-stronger-euro-is-good-news-for-investors
EU Economy

Why a stronger euro is good news for investors

The fragile state of the eurozone has for a long time brought the threat of deflation. But the ECB’s latest moves have dampened those fears. John Step…
5 Jun 2020
Visit/economy/eu-economy/601422/heres-why-investors-should-care-about-the-eus-plan-to-tackle-covid-19
EU Economy

Here’s why investors should care about the EU’s plan to tackle Covid-19

The EU's €750bn rescue package makes a break-up of the eurozone much less likely. John Stepek explains why the scheme is such a big deal, and what it …
28 May 2020
Visit/economy/eu-economy/601277/germany-throws-a-spanner-in-the-eurozones-works
EU Economy

Germany throws a spanner in the eurozone’s works

A German court has told the ECB to beware of exceeding its mandate with its QE scheme. John Stepek explains what this means, and why it matters.
5 May 2020

Most Popular

Visit/investments/commodities/gold/601444/these-seven-charts-show-exactly-why-you-must-own-gold-today
Gold

These seven charts show exactly why you must own gold today

Covid-19 is accelerating many trends that were already in existence. The rising gold price is one such trend. These seven charts, says Dominic Frisby,…
3 Jun 2020
Visit/investments/stockmarkets/601460/disease-rioting-and-mass-unemployment-so-why-are-markets-soaring
Stockmarkets

Disease, rioting and mass unemployment – so why are markets soaring?

Despite some pretty strong headwinds in the last year, America’s S&P 500 stock index is close to all-time highs. John Stepek explains why markets seem…
4 Jun 2020
Visit/investments/commodities/601433/commodities-possibly-the-biggest-opportunity-in-todays-markets
Commodities

This looks like the biggest opportunity in today’s markets

With low interest rates and constant money-printing, most assets have become expensive. But one major asset class hasn’t. John Stepek explains why com…
2 Jun 2020