Greek issue is taken off from the agenda

Greek issue is taken off from the agenda

Negotiations of European Group and the IMF on the Greek issue has ended surprisingly quickly and virtually "bloodless". Apart from the fact that the current program provides assistance in an amount of more than 10 billion Euros, parties managed to agree on a restructuring of Greek debt after 2018, when the validity of the current program ends. Solution appears surprisingly quickly. Although, if you look at the history of the issue you will see that the other solution wouldn’t be possible.

The head of the European Group said that important agreements that allow them to move to the next stage in the implementation of aid to Greece have been achieved during negotiations. The truth is that Athens also did they work well, as they were able to fulfill terms of lenders. After all, it was a step that made such assistance and debt restructuring possible.

Not so long ago the media headlines that Greece will face default in July, as the country must repay part of the debt in an amount of 3.5 billion Euros. However, it is already clear that with such a loan, Athens will easily fulfill all the terms of lenders and will avoid default once again.

In accordance with the current assistance program, Greece is expected to reach a budget surplus of 3.5% of GDP already in 2018. However, the head of the European Group made it clear that these conditions can be reconsidered towards easing after 2018, taking into account debt restructuring.

As for the IMF, the organization will also be involved in lending to Athens. Earlier, the International Monetary Fund has distanced himself from participation in the program, as it had doubts about the feasibility of Greece to implement obligation on budget surplus. However it is expected that the IMF will join the assistance by the end of this year.

Positive news for Greece - in 2018 the ultimate level of debt repayments may be reduced and the interest payment may be delayed. In order to repay the old loans, Greece will be provided with new ones. However, no one can define a more accurate scheme. Therefore, it remains only to wait.

In turn, Athens is also not standing still. New laws, which are designed to increase tax revenues, are created. It is planned that mechanisms will be developed in the near future, according to which the country will be able to automatically reduce expenses if the deficit exceeds the set limits.

As for the traders, the news has not much impact on currency pairs. But do not forget that in case of delaying of solving the problem, the pressure on the euro will be intensified, which could create an additional hurdle to growth. Now it is better to wait for the Fed's decision, which will be announced in mid-June.


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