Is Greece waving the white flag?

After finally defaulting on its payments to the IMF, reports are circulating that Greece has agreed to most of creditors' demands. So is the crisis over? Matthew Partridge investigates.


What's going on?

As a result, Greek went into default, becoming the first developed country in history to default (or technically go into arrears on) an IMF loan.

However, this morning the Greek PM shocked commentators by sending a letter to the "Eurogroup", stating that Greece was prepared to accept the terms of the deal offered on Sunday, which itself was based on the offer on Friday, with only a few minor changes.

Are there any strings attached?

Yesterday, the European Commission reportedly promised that a conference on debt relief (one of the key European demands) would be held in October, if Greece accepted the deal. It is not known whether this is still on the table, or if it was ever part of an offer, and it is not mentioned in the letter.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Recent events may also make it harder for the creditors to make significant concessions on this issue.

So, is everything settled then?

The main sticking point seems to be that they will not talk to Greece until the referendum has either been cancelled or resulted in a victory for the "Yes" camp.

While Germany has indicated a preference for the latter, cancelling the referendum may be the politically easiest option for him. Criticism from the Council of Europe that there isn't enough time to properly consult Greek voters may also provide asmokescreenfor a cancellation.

What about Tsipras's own party?

While there is still a chance that parliament could reject the deal, Tsipras should be able to win enough support from the other parties. However, if he doesn't win enough concessions on debt relief, or the economy doesn't start to radically pick up, his positioncould become untenable.

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri