7th July 2015
– The Greek government has reportedly failed to submit any firm plans for consideration by its eurozone creditors at this evening’s summit, despite being urged to do so.
– The Prime Minister of Malta Joseph Muscat tweeted that “no concrete proposals” had been submitted by Greece, which “doesn’t help this evening’s eurozone leaders’ meeting.”
-The BBC reports that Greek Prime Minister Alexis Tsipras will address the European Parliament tomorrow.
-France has pledged to do all it can to keep Greece in the eurozone, as the risks of allowing a Grexit are too great, Prime Minister Manuel Valls has said.
Ahead of the emergency talks in Brussels today, Valls said “the basis for a deal exists”, but Germany has cautioned against the unconditional write-off of Greek debts.
The summit was prompted by Sunday’s referendum result, in which the Greek people voted against the bailout offer that was on the table, due to the austerity measures required.
Greece’s Prime Minister Alexis Tsipras had been expected to request that the country’s €323bn £228bn) debt to be reduced by up to 30%, with a 20-year grace period.
Greek banks will remain closed at least for today and tomorrow as the European Central Bank (ECB) will not increase the emergency liquidity they would need in order to open.
Andrew Wilson, head of investment at Towry, says: “Even just after its finest hour with the ‘No’ vote in Sunday’s referendum, the Greek government could yet prove vulnerable to events to come, and, having emboldened its most radical elements, successful negotiations may prove more elusive than ever. The next key date in the ongoing ‘crisis’ will be Monday July 20th, as this marks the point at which the Greeks must pay the ECB some €3.5bn, which given recent events and Greece’s capital position seems implausible.
“The threat of the Greek situation proving contagious to other parts of Europe is clear, with Portugal and Italy the most likely markets to feel the cool winds emanating from Athens. However, the ECB is likely to provide liquidity to the Eurozone, and to hoover up peripheral debt via Quantitative Easing and using Outright Money Transactions where necessary in order to try and stem such contagion spreading.
“Markets, which are yet to react significantly to Sunday’s ‘No’, will continue to follow the news from Brussels and Athens with laser precision. There will also be future impacts to consider, such as whether the Greek saga will lead to a delay in the FED raising rates. Depending on how events unfold, we remain open to build value into our portfolios should markets overreact.”
Elsewhere on Mindful Money, Rowan Dartington Signature’s Guy Stephens reflects on whether Tsipras’s referendum gamble will pay off and Invesco’s John Greenwood looks at what comes next in the Greek crisis.