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Greece's 'breakthrough' debt deal boosts markets – business live Debt campaigners criticise IMF over Greek deal - live updates
(35 minutes later)
8.59am BST
08:59
IMF criticised over Greek climbdown
The International Monetary Fund is coming under fire from debt campaigners this morning.
They’re disappointed that the Fund has abandoned its commitment to “upfront” Greek debt relief as part of last night’s deal.
Instead, medium-term debt relief will only kick in around 2018 - and the details are still
Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign, says this isn’t acceptable:
“IMF staff are proposing to lend more money to Greece without the upfront and unconditional debt relief they called for. This is a major climb down, which once again breaks the IMF’s own rules not to lend when they know a debt cannot be paid.
Last night, the IMF’s Poul Thomsen agreed that the Fund had made a ‘major concession’, in order to reach a deal.
In return, all creditors agreed that Greece’s debts are unsustainable, paving the way to debt relief over time.
Clifton though, insists that action is needed now.
“Eurozone finance ministers cannot keep repeating this pattern of sticking plaster measures followed by near defaults and all night crisis meetings for the next 40 years. Only significant cancellation of Greece’s debt now, including payments coming due now such as to the IMF and ECB, will help tackle the humanitarian crisis in the country and restore the lack of confidence which is holding back Greece and the wider European economy.”
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Economist Megan Greene, of asset management firm Manulife, says Berlin appears to have won last night’s Tussle in Brussels:
Summary of Eurogroup: Germany always wins, IMF caves under pressure from Germany and US, no one does what's in Greece's best interests
8.47am BST8.47am BST
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Greece’s stock market has jumped by 1.4% in early trading, led by bank stocks.Greece’s stock market has jumped by 1.4% in early trading, led by bank stocks.
8.45am BST8.45am BST
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Greek bond yields hit six-month lowGreek bond yields hit six-month low
Greek government bonds are on an absolute tear this morning, as fears of a disorderly default fade away.Greek government bonds are on an absolute tear this morning, as fears of a disorderly default fade away.
The country’s 10-year bonds are rallying hard, driving down the interest rate (or yield) on the debt below 7% for the first time since last November.The country’s 10-year bonds are rallying hard, driving down the interest rate (or yield) on the debt below 7% for the first time since last November.
That’s an important sign – 7% is traditionally the level where a country’s debts are unaffordable.That’s an important sign – 7% is traditionally the level where a country’s debts are unaffordable.
So investors are calculating that this agreement is significant, despite the doubts and question marks.So investors are calculating that this agreement is significant, despite the doubts and question marks.
#Greece's 10y yields drop below 7% for first time since Nov after deal w/ creditors. pic.twitter.com/Uc8QEm0mAg#Greece's 10y yields drop below 7% for first time since Nov after deal w/ creditors. pic.twitter.com/Uc8QEm0mAg
8.40am BST8.40am BST
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Henrik Enderlein, director of the Jacques Delors Institute, sums up the deal:Henrik Enderlein, director of the Jacques Delors Institute, sums up the deal:
They're still kicking the can down the road on #Greece, even if they're now kicking in the right direction.They're still kicking the can down the road on #Greece, even if they're now kicking in the right direction.
8.38am BST8.38am BST
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Dijsselbloem: Deal is a really important stepDijsselbloem: Deal is a really important step
After a few hours sleep, Eurozone ministers are returning to the Justis Lipsius building for a full Ecofin meeting with EU ministers.After a few hours sleep, Eurozone ministers are returning to the Justis Lipsius building for a full Ecofin meeting with EU ministers.
They won’t be discussing Greece - instead, they’ll be debating an anti tax avoidance Directive.They won’t be discussing Greece - instead, they’ll be debating an anti tax avoidance Directive.
Commissioner Pierre Moscovici just shared a touching embrace with Eurogroup president Jeroen Dijsselbloem.Commissioner Pierre Moscovici just shared a touching embrace with Eurogroup president Jeroen Dijsselbloem.
A cheerful-sounding Dijsselbloem then says that last night’s agreement with Greece is a “really important step”.A cheerful-sounding Dijsselbloem then says that last night’s agreement with Greece is a “really important step”.
All sides realised we had to get a deal, he says, even though we all realised it would be difficult.All sides realised we had to get a deal, he says, even though we all realised it would be difficult.
The IMF was asking a lot, and we were asking a lot of Greece.The IMF was asking a lot, and we were asking a lot of Greece.
But the deal brings the IMF on board, strengthens confidence between all sides, and thus should improve confidence within the eurozone.But the deal brings the IMF on board, strengthens confidence between all sides, and thus should improve confidence within the eurozone.
Q: So are we 100% sure that the IMF will be on board?Q: So are we 100% sure that the IMF will be on board?
No, Dijsselbloem says. The Fund must conduct its own debt sustainability analysis, and the final decision is up to its board.No, Dijsselbloem says. The Fund must conduct its own debt sustainability analysis, and the final decision is up to its board.
8.28am BST8.28am BST
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Analyst: Next Greek crisis will along soonAnalyst: Next Greek crisis will along soon
Marc Ostwald of City firm ADM Investor Services is also underwhelmed by the deal:Marc Ostwald of City firm ADM Investor Services is also underwhelmed by the deal:
This is another to be sorted under ‘can kicking’, leaving any decision on genuine debt relief until 2018, after the French and German elections, but also not creating any precedents or short-term crises which might influence the Italian municipal elections on June 5, the UK Brexit referendum on June 23 or the Spanish election on June 26.This is another to be sorted under ‘can kicking’, leaving any decision on genuine debt relief until 2018, after the French and German elections, but also not creating any precedents or short-term crises which might influence the Italian municipal elections on June 5, the UK Brexit referendum on June 23 or the Spanish election on June 26.
It also continues to impose austerity measures which will continue to strangle the Greek economy, per se ensuring that the next crisis moment in the Greek saga will not be far away.It also continues to impose austerity measures which will continue to strangle the Greek economy, per se ensuring that the next crisis moment in the Greek saga will not be far away.
8.27am BST8.27am BST
08:2708:27
Stock markets hit three-week highsStock markets hit three-week highs
European stock markets have jumped in early trading.European stock markets have jumped in early trading.
The news that Greece will finally receive the €10bn bailout tranche is easing concerns of another eurozone financial crisis over the summer, on top of Britain’s EU referendum.The news that Greece will finally receive the €10bn bailout tranche is easing concerns of another eurozone financial crisis over the summer, on top of Britain’s EU referendum.
In London, the FTSE 100 has swiftly gained 40 points, or 0.6%, to 6255. That’s its highest level since May 3rd. Germany’s DAX has gained 0.8%.In London, the FTSE 100 has swiftly gained 40 points, or 0.6%, to 6255. That’s its highest level since May 3rd. Germany’s DAX has gained 0.8%.
8.19am BST8.19am BST
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Peter Spiegel, the FT’s former Brussels bureau chief, isn’t completely convinced by the agreement.Peter Spiegel, the FT’s former Brussels bureau chief, isn’t completely convinced by the agreement.
So #Greece & #IMF have fallen for German promises of future debt relief...again? Nov 2011, July 2015, now 2018...won't be holding my breathSo #Greece & #IMF have fallen for German promises of future debt relief...again? Nov 2011, July 2015, now 2018...won't be holding my breath
8.16am BST8.16am BST
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Last night’s deal may not be perfect, but it appears to ‘kick the can’ down the road until after France and Germany have gone to the polls in 2017.Last night’s deal may not be perfect, but it appears to ‘kick the can’ down the road until after France and Germany have gone to the polls in 2017.
Analysts at RBC Capital Markets explain:Analysts at RBC Capital Markets explain:
€7.5bn will be released in June that will allow Greece cover maturing IMF and ECB loans in June and July and begin to clear arrears which have built up as the review process has stalled. The outstanding portion of the payment will then be made after the summer. There was also agreement on a roadmap for Greek debt relief. In the short term this is mainly through managing the interest rate and repayment profile of euro area loans. Further out, there was commitment on further measures once the programme is completed in 2018.€7.5bn will be released in June that will allow Greece cover maturing IMF and ECB loans in June and July and begin to clear arrears which have built up as the review process has stalled. The outstanding portion of the payment will then be made after the summer. There was also agreement on a roadmap for Greek debt relief. In the short term this is mainly through managing the interest rate and repayment profile of euro area loans. Further out, there was commitment on further measures once the programme is completed in 2018.
While not quite the unconditional debt relief the IMF had called for in its assessment of Greece’s debt sustainability, the measures are sufficient for the Fund to stay involved in the programme although that will still have to be formally approved by the IMF board.While not quite the unconditional debt relief the IMF had called for in its assessment of Greece’s debt sustainability, the measures are sufficient for the Fund to stay involved in the programme although that will still have to be formally approved by the IMF board.
The deal means that Greece should now be ‘parked’ until after next year’s German general and French presidential elections but, equally important, any decision on Greek debt relief won’t have to be taken in the German parliament until after the next autumn’s vote.The deal means that Greece should now be ‘parked’ until after next year’s German general and French presidential elections but, equally important, any decision on Greek debt relief won’t have to be taken in the German parliament until after the next autumn’s vote.
8.13am BST8.13am BST
08:1308:13
Eurozone government debt surges after Greek deal.Eurozone government debt surges after Greek deal.
Money is pouring into government debt issued by the eurozone’s weaker members this morning, as investors react to Greece’s debt real.Money is pouring into government debt issued by the eurozone’s weaker members this morning, as investors react to Greece’s debt real.
This has driven down the yield (or interest rate) on peripheral government bonds -- a sign that traders are happy to buy these riskier assets.This has driven down the yield (or interest rate) on peripheral government bonds -- a sign that traders are happy to buy these riskier assets.
Reuters has the details:Reuters has the details:
Portugal’s 10-bond yield fell 4.8 basis points to a three-week low at 3.02%, while Spanish and Italian 10-year bond yields fell to one-month lows at around 1.51% and 1.40% respectively.Portugal’s 10-bond yield fell 4.8 basis points to a three-week low at 3.02%, while Spanish and Italian 10-year bond yields fell to one-month lows at around 1.51% and 1.40% respectively.
“The agreement between Greece and its creditors is positive for risk sentiment and in turn peripheral bond markets,” said Rene Arecht, a derivatives market analyst at DZ Bank.“The agreement between Greece and its creditors is positive for risk sentiment and in turn peripheral bond markets,” said Rene Arecht, a derivatives market analyst at DZ Bank.
I imagine we’ll also see a rally when the Greek stock and bond markets open shortly....I imagine we’ll also see a rally when the Greek stock and bond markets open shortly....
8.01am BST8.01am BST
08:0108:01
Full Story: IMF makes concessionsFull Story: IMF makes concessions
Our Brussels correspondent, Jennifer Rankin, explains how the IMF has backed down over its demands for immediate Greek debt relief:Our Brussels correspondent, Jennifer Rankin, explains how the IMF has backed down over its demands for immediate Greek debt relief:
European officials have agreed to unlock €10.3bn in bailout money for Greece as the International Monetary Fund made a significant climbdown in its demand for upfront debt relief for the recession-hit country.European officials have agreed to unlock €10.3bn in bailout money for Greece as the International Monetary Fund made a significant climbdown in its demand for upfront debt relief for the recession-hit country.
Greece’s international creditors emerged from an 11-hour meeting in Brussels at 2am on Wednesday having agreed on steps to ease the burden of Greece’s €321bn (£245bn) debt mountain, worth 180% of annual economic output.Greece’s international creditors emerged from an 11-hour meeting in Brussels at 2am on Wednesday having agreed on steps to ease the burden of Greece’s €321bn (£245bn) debt mountain, worth 180% of annual economic output.
But the debt relief plan was a far cry from the “upfront” and “unconditional” debt relief the IMF had demanded on Monday, when it warned that Greece would face an ever-growing bill to service its loans. Poul Thomsen, director of the IMF’s European programme, said the IMF had made “a major concession”. “We had argued that [debt relief measures] should be approved up front and [now] we have agreed that they should be made at the end of the programme period.But the debt relief plan was a far cry from the “upfront” and “unconditional” debt relief the IMF had demanded on Monday, when it warned that Greece would face an ever-growing bill to service its loans. Poul Thomsen, director of the IMF’s European programme, said the IMF had made “a major concession”. “We had argued that [debt relief measures] should be approved up front and [now] we have agreed that they should be made at the end of the programme period.
Here’s her full dispatch from Brussels, a few hours ago:Here’s her full dispatch from Brussels, a few hours ago:
Related: Eurozone unlocks €10.3bn bailout loan for GreeceRelated: Eurozone unlocks €10.3bn bailout loan for Greece
7.46am BST7.46am BST
07:4607:46
The agenda: Greece finally gets a dealThe agenda: Greece finally gets a deal
Good morning.Good morning.
There’s a sense of relief in the eurozone this morning after Greece and its creditors finally hammered out a deal to unlock €10bn in bailout funds, and trigger work on debt relief.There’s a sense of relief in the eurozone this morning after Greece and its creditors finally hammered out a deal to unlock €10bn in bailout funds, and trigger work on debt relief.
After a lengthy meeting, which we liveblogged through the night, ministers emerged to report that a breakthrough had been reached.After a lengthy meeting, which we liveblogged through the night, ministers emerged to report that a breakthrough had been reached.
Both sides appear to have given some ground to get the deal onto the table.Both sides appear to have given some ground to get the deal onto the table.
One the one hand, all creditors have agreed that Greece’s debt mountain is unsustainable – suggesting Germany has given up some ground.One the one hand, all creditors have agreed that Greece’s debt mountain is unsustainable – suggesting Germany has given up some ground.
On the other, debt relief isn’t as immediate or concrete as the International Monetary Fund has been demanded, meaning the Fund has made concessions too.On the other, debt relief isn’t as immediate or concrete as the International Monetary Fund has been demanded, meaning the Fund has made concessions too.
Related: Eurozone reaches breakthrough on Greek bailout and debt relief - as it happenedRelated: Eurozone reaches breakthrough on Greek bailout and debt relief - as it happened
If you were snoozing during the action, here’s the key points:If you were snoozing during the action, here’s the key points:
1) Greece has finally received the green light to receive more than €10bn in bailout funds, easing concerns that it could face financial peril this summer.1) Greece has finally received the green light to receive more than €10bn in bailout funds, easing concerns that it could face financial peril this summer.
A few prior actions do remain, concerning pensions and privatisations, but once that is resolved, the money will flow -- starting with €7.5bn in June.A few prior actions do remain, concerning pensions and privatisations, but once that is resolved, the money will flow -- starting with €7.5bn in June.
Eurogroup president Jeroen Dijsselbloem told reporters that Greece’s programme was back on track.Eurogroup president Jeroen Dijsselbloem told reporters that Greece’s programme was back on track.
“We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme....“We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme....
This is stretching what I thought would have been possible not so long ago.”This is stretching what I thought would have been possible not so long ago.”
2) In an important development, the International Monetary Fund has signalled that it could join the bailout. That could happen by the end of 2016.2) In an important development, the International Monetary Fund has signalled that it could join the bailout. That could happen by the end of 2016.
However, the IMF’s European chief Poul Thomsen insisted that the Fund must check that the eurozone is offering substantial debt relief.However, the IMF’s European chief Poul Thomsen insisted that the Fund must check that the eurozone is offering substantial debt relief.
In a rare public appearance, Thomsen said:In a rare public appearance, Thomsen said:
We welcome that all stakeholders recognise that Greek debt is unsustainable. We welcome that it is understood that Greece needs debt relief to make it sustainable.We welcome that all stakeholders recognise that Greek debt is unsustainable. We welcome that it is understood that Greece needs debt relief to make it sustainable.
3) Eurozone ministers have agreed to “a package of debt measures” to make Greece’s debts sustainable.3) Eurozone ministers have agreed to “a package of debt measures” to make Greece’s debts sustainable.
That will start with short-term tweaks to Greece’s debts, to smooth out its obligations.That will start with short-term tweaks to Greece’s debts, to smooth out its obligations.
Medium-term measures are also promised, although not until 2018, which looks like a concession from the IMF.Medium-term measures are also promised, although not until 2018, which looks like a concession from the IMF.
There is also a commitment to consider whether further restructuring will be needed once the bailout ends, assuming Athens sticks to the programme and everything works out. However, this doesn’t appear to be as comprehensive, wide-ranging and unconditional as the IMF has been demanding.There is also a commitment to consider whether further restructuring will be needed once the bailout ends, assuming Athens sticks to the programme and everything works out. However, this doesn’t appear to be as comprehensive, wide-ranging and unconditional as the IMF has been demanding.
4) The deal has been generally welcomed by Greece’s finance minister. Euclid Tsakalotos said it would help end the country’s vicious circle of austerity and recession.4) The deal has been generally welcomed by Greece’s finance minister. Euclid Tsakalotos said it would help end the country’s vicious circle of austerity and recession.
Donald Tusk, the head of the European Council, said the Greek deal was good for the global economy.Donald Tusk, the head of the European Council, said the Greek deal was good for the global economy.
Slovakia’s finance minister Peter Kazimir also sounded satisfied, comparing the negotiations to “a complicated birth”.Slovakia’s finance minister Peter Kazimir also sounded satisfied, comparing the negotiations to “a complicated birth”.
And France’s Michel Sapin was positively upbeat, saying the deal was “first and foremost a declaration of confidence in today’s Greece.”And France’s Michel Sapin was positively upbeat, saying the deal was “first and foremost a declaration of confidence in today’s Greece.”
But that was last night. Now that people have slept on it (however briefly), we should get some proper reaction.But that was last night. Now that people have slept on it (however briefly), we should get some proper reaction.
UpdatedUpdated
at 7.53am BSTat 7.53am BST