Senior EU Official Formally Discuss Grexit for First Time

Senior EU officials have formally discussed for the first time a possible Greek debt default as negotiations between Athens and its creditors have stalled ahead of an end-month repayment deadline, several officials told Reuters.

The government representatives, preparing next week’s Eurogroup meeting of euro zone finance ministers, concluded at talks in Bratislava late on Thursday that there were three possible scenarios for what would happen with Greece at the end of June. The least likely, they think, is a successful cash-for-reform deal next week in time to meet end-June legal deadlines.

The second possibility was a further extension of the current bailout program, which expires this month at the same time as Greece must repay 1.6 billion euros to the IMF. The third — discussed formally for the first time at such a senior level in the EU — was to accept Greece could default.

The meeting reached no decision or concrete conclusion.

Most officials argued that it was unlikely that creditors would strike a deal on reforms with Athens in time to disburse the 7.2 billion euros that remain available to Greece under a rescue program extended in February for four months.

“It would require progress in a matter of days that has not been possible in weeks. The reaction of the ECB, the IMF and several member states was extremely skeptical,” one official familiar with the discussions said on Friday.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza