Saturday, June 13, 2015

An Update on Greece - The Land of Endless Deadlines

We have not talked much about Greece here on the blog recently. This is because we came to the conclusion awhile back that despite all the headlines and hoopla in the media, Greece did not face a real potential deadline until the end of June. This article Reuters article provides an update, but things are really still just in limbo while the negotiations continue. Below are a few quotes from this Reuters article.


"A top EU official urged Greece on Thursday to step up efforts to come up with a list of reforms, saying that reaching a deal with its international lenders was possible but that work must be intensified in the coming days.

"I really like Greek tragedy but now we must move to the happy ending," EU Economic Affairs Commissioner Pierre Moscovici told RTL radio.

Referring to a June 18 meeting of euro zone finance ministers, he said: "In the coming days we must really intensify talks and they must be productive."

Moscovici said divergences remained, in particular on Greece's primary surplus, but added: "We are close to the landing strip. There is political will, we can and must succeed."
My added comments:
Here is what I have come to believe about the situation in Greece after all the seemingly endless deadlines come and go. There really is never a true deadline. Even this new one coming up at the end of June may not be a real deadline.
If they don't come up with a new plan to kick the can down the road again for awhile longer, they can always just agree to extend the present terms for another 30 days to continue talking. No one really thinks at this point that either side is going to risk the consequences of letting Greece fall into a true default. Both sides have too much to lose.
The most likely outcome is that at some point both sides will finally agree to something that will once again only kick the can down the road (they both know Greece will never pay off their existing debt). If that changes we will cover it here. But I suspect Jim Rickards will end up being right on this again. He has said all along there will be no "Grexit". Just a lot of drama between each kick of the can.

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