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| Debt campaigners criticise IMF over Greek deal - live updates | Debt campaigners criticise IMF over Greek deal - live updates |
| (35 minutes later) | |
| 5.15pm BST | |
| 17:15 | |
| After Moody’s saying the Greek deal was credit positive, Fitch has also welcomed the late night agreement but warned of possible problems implementing reform measures. The ratings agency said: | |
| The agreement reached between Greece and its eurozone creditors reduces the risk of another Greek liquidity crisis this summer, and incentivises the country to complete its third bail-out programme. However, with little debt relief offered upfront, the Greek government may find it progressively more difficult to continue with politically controversial measures required to meet ambitious programme commitments. Implementation risk therefore remains high. | |
| The agreement highlights the improved relations between Greece and its official creditors since last summer’s often confrontational negotiations leading up to the current ESM programme. The Greek government has implemented prior actions, including pension reform and a contentious requirement for additional fiscal contingency measures to safeguard the 2018 budget target. | |
| For their part, Greece’s official creditors have agreed to possible debt relief (nominal haircuts are still excluded)... | |
| Delivering debt relief in stages and contingent on programme performance could incentivise the Greek authorities to meet programme targets. However, given the track record of slippage under previous programmes in the past five years, we think there is still a high risk that the 2018 surplus target will be missed despite the agreement on a contingency fiscal mechanism. This risk could increase if the conditionality in Wednesday’s agreement meant that sizeable debt relief came to be seen by Greek politicians or the public as a distant or unattainable prospect. | |
| A question mark is therefore likely to remain over the sustainability of Greek debt in the medium term. While gross financing needs are modest over the next few years, substantial increases in gross financing requirements would follow in the long term without further debt re-profiling. | |
| Our ‘CCC’ sovereign rating, which we affirmed in March, reflects risks to programme implementation and debt sustainability. | |
| 5.07pm BST | 5.07pm BST |
| 17:07 | 17:07 |
| The Eurogroup “breakthrough” on debt relief was no such thing, says Joan Hoey, Greek analyst at the Economist Intelligence Unit: | The Eurogroup “breakthrough” on debt relief was no such thing, says Joan Hoey, Greek analyst at the Economist Intelligence Unit: |
| The coveted debt relief upon which the [Greek] prime minister has been banking, to provide a political fig leaf for his acceptance of another bailout, remains out of reach, contingent and unquantified. | The coveted debt relief upon which the [Greek] prime minister has been banking, to provide a political fig leaf for his acceptance of another bailout, remains out of reach, contingent and unquantified. |
| The Eurogroup did not finalise the long-delayed first review of the bailout programme. It looked at the reforms passed so far and found them wanting. It concluded that several conditions “prior reforms” will have to be met before any money can be handed over. | The Eurogroup did not finalise the long-delayed first review of the bailout programme. It looked at the reforms passed so far and found them wanting. It concluded that several conditions “prior reforms” will have to be met before any money can be handed over. |
| The release of funds would then follow in two sub-tranches, the first amount of €7.5bn in June, depending on successful completion of “prior actions”. The balance of €2.8bn will be released only after the clearance of government arrears and after the government has met milestones related to the privatisation fund, bank governance, the revenue collection agency and the energy sector. This disbursement is scheduled for the end of the third quarter. | The release of funds would then follow in two sub-tranches, the first amount of €7.5bn in June, depending on successful completion of “prior actions”. The balance of €2.8bn will be released only after the clearance of government arrears and after the government has met milestones related to the privatisation fund, bank governance, the revenue collection agency and the energy sector. This disbursement is scheduled for the end of the third quarter. |
| The Eurogroup won a commitment from the IMF, with which it has been at loggerheads over debt relief, to participate in the bailout, pending approval from the Fund’s executive board. | The Eurogroup won a commitment from the IMF, with which it has been at loggerheads over debt relief, to participate in the bailout, pending approval from the Fund’s executive board. |
| We retain our view that disaffection in the party and among the electorate will grow, posing risks to political stability and Greece’s membership of the eurozone. | We retain our view that disaffection in the party and among the electorate will grow, posing risks to political stability and Greece’s membership of the eurozone. |
| 4.26pm BST | 4.26pm BST |
| 16:26 | 16:26 |
| And now some comments emerging from the IMF: | And now some comments emerging from the IMF: |
| *IMF OFFICIAL: NEED MORE CONCRETE DEBT-RELIEF DETAILS ON GREECE | *IMF OFFICIAL: NEED MORE CONCRETE DEBT-RELIEF DETAILS ON GREECE |
| *IMF SHOULD BE ABLE TO CONSIDER GREEK LOAN BY YEAR-END: OFFICIAL | *IMF SHOULD BE ABLE TO CONSIDER GREEK LOAN BY YEAR-END: OFFICIAL |
| #IMF NOT ENDORSING GREEK DEAL UNTIL BOARD APPROVES - IMF SHOULD BE ABLE TO CONSIDER GREEK LOAN BY YEAR-END: OFFICIAL | #IMF NOT ENDORSING GREEK DEAL UNTIL BOARD APPROVES - IMF SHOULD BE ABLE TO CONSIDER GREEK LOAN BY YEAR-END: OFFICIAL |
| 4.17pm BST | 4.17pm BST |
| 16:17 | 16:17 |
| Here’s a timeline of Greece’s incoming bailout funds and outgoing payments in the next few months: | Here’s a timeline of Greece’s incoming bailout funds and outgoing payments in the next few months: |
| 4.12pm BST | 4.12pm BST |
| 16:12 | 16:12 |
| European markets are holding onto their gains as they head to the close. Jasper Lawler, market analyst at CMC Markets, said: | European markets are holding onto their gains as they head to the close. Jasper Lawler, market analyst at CMC Markets, said: |
| Stocks extended gains on Wednesday as a tentative agreement on Greek debt relief and a fresh seven-month high in the price of US oil offered more cause for optimism. Banks were top risers for a second day as markets price-in the earnings benefit of a possible US rate rise in the summer. Banks in the peripheral of Europe most exposed to Greek debt, including Spain’s Banco Santander, were top performers. | Stocks extended gains on Wednesday as a tentative agreement on Greek debt relief and a fresh seven-month high in the price of US oil offered more cause for optimism. Banks were top risers for a second day as markets price-in the earnings benefit of a possible US rate rise in the summer. Banks in the peripheral of Europe most exposed to Greek debt, including Spain’s Banco Santander, were top performers. |
| Less exposure to Greece and weak earnings from M&S weighed on the FTSE 100, which rose less than its European counterparts. | Less exposure to Greece and weak earnings from M&S weighed on the FTSE 100, which rose less than its European counterparts. |
| Greek shares rose and the yield on Greek Debt fell after the IMF and Germany deferred a quarrel on Greek debt relief until 2018... Greece avoiding another cliff-edge moment is undoubtedly positive for markets, which already face the uncertainty of the Brexit referendum and Spanish elections in June. | Greek shares rose and the yield on Greek Debt fell after the IMF and Germany deferred a quarrel on Greek debt relief until 2018... Greece avoiding another cliff-edge moment is undoubtedly positive for markets, which already face the uncertainty of the Brexit referendum and Spanish elections in June. |
| 4.09pm BST | 4.09pm BST |
| 16:09 | 16:09 |
| The funds to be released following the late night Eurogroup agreement should last Greece until the end of October when the second review of the bailout programme is due start, according to the Athens-Macedonian News Agency. It says: | The funds to be released following the late night Eurogroup agreement should last Greece until the end of October when the second review of the bailout programme is due start, according to the Athens-Macedonian News Agency. It says: |
| The €10.3bn tranche that the Eurogroup decided to disburse to Greece will fully meet the country’s financing needs until the end of October, when the second review of the Greek programme is set to start, Eurozone officials said on Wednesday. | The €10.3bn tranche that the Eurogroup decided to disburse to Greece will fully meet the country’s financing needs until the end of October, when the second review of the Greek programme is set to start, Eurozone officials said on Wednesday. |
| Describing the events behind the scenes at Tuesday’s Eurogroup, the sources said that the IMF and Europeans had reached a compromise in spite of their different initial positions, while confirming that the IMF will participate. According to one EU official, this was not so much a “power play” but more that all sides moved from their initial position, with the IMF fully understanding that the Eurozone operates in a different way from the fund. | Describing the events behind the scenes at Tuesday’s Eurogroup, the sources said that the IMF and Europeans had reached a compromise in spite of their different initial positions, while confirming that the IMF will participate. According to one EU official, this was not so much a “power play” but more that all sides moved from their initial position, with the IMF fully understanding that the Eurozone operates in a different way from the fund. |
| Regarding the measures for the debt, the European sources said that there were no “immediate decisions” but this was not a surprise, since there were no debts maturing in the short term. In the medium-term, the Eurozone countries said they will examine the possibility of buying up debt to the IMF early, or the bilateral loans with Eurozone countries, using the unspent funds (approximately 20 billion euros) originally destined for the recapitalisation of the banks. This would, however, require the approval of some national parliaments. | Regarding the measures for the debt, the European sources said that there were no “immediate decisions” but this was not a surprise, since there were no debts maturing in the short term. In the medium-term, the Eurozone countries said they will examine the possibility of buying up debt to the IMF early, or the bilateral loans with Eurozone countries, using the unspent funds (approximately 20 billion euros) originally destined for the recapitalisation of the banks. This would, however, require the approval of some national parliaments. |
| According to Eurozone officials, the chances that Greece can return to borrowing from the markets at reasonable interest rates at the end of the programme are much higher following the agreement at Tuesday’s Eurogroup. They said that Greece’s access to the markets can begin to be restored gradually, in the second half of 2017, and that the aim is to restore full market access by the end of 2018. | According to Eurozone officials, the chances that Greece can return to borrowing from the markets at reasonable interest rates at the end of the programme are much higher following the agreement at Tuesday’s Eurogroup. They said that Greece’s access to the markets can begin to be restored gradually, in the second half of 2017, and that the aim is to restore full market access by the end of 2018. |
| The more credible Greece’s economic policy, including its success in delivering primary surplus targets, the smaller the spreads on Greek bonds will be, though borrowing from the Eurozone will always be cheaper, the same sources said. The second review of the Greek programme would begin at the end of October, they added, noting that the measures that remained to be taken will not be as difficult as those required by the first review. | The more credible Greece’s economic policy, including its success in delivering primary surplus targets, the smaller the spreads on Greek bonds will be, though borrowing from the Eurozone will always be cheaper, the same sources said. The second review of the Greek programme would begin at the end of October, they added, noting that the measures that remained to be taken will not be as difficult as those required by the first review. |
| 3.54pm BST | 3.54pm BST |
| 15:54 | 15:54 |
| Helena Smith | Helena Smith |
| In Greece trade unionists are already flexing their muscles and planning mass industrial action, reports Helena Smith. | In Greece trade unionists are already flexing their muscles and planning mass industrial action, reports Helena Smith. |
| Strikes are expected to start tomorrow when workers at the Piraeus Port Organisation and Thessaloniki Port Organisation begin a 48-hour walk-out in opposition to the controversial privatisation programme the government has signed up to. | Strikes are expected to start tomorrow when workers at the Piraeus Port Organisation and Thessaloniki Port Organisation begin a 48-hour walk-out in opposition to the controversial privatisation programme the government has signed up to. |
| Adedy, which represents employees in the public sector, has also decided to hold a Pan-Hellenic work stoppage on June 8. “We decided, today, after meeting health and education federations that we would take this action to protest all the things that these new measures mean: lack of staff, underfunding, appointments that should, but will never happen,” Adedy’s chief policy maker, Grigoris Kalomoiris told the Guardian. | Adedy, which represents employees in the public sector, has also decided to hold a Pan-Hellenic work stoppage on June 8. “We decided, today, after meeting health and education federations that we would take this action to protest all the things that these new measures mean: lack of staff, underfunding, appointments that should, but will never happen,” Adedy’s chief policy maker, Grigoris Kalomoiris told the Guardian. |
| “The Eurogroup was a fiasco for Greece. The government was just a spectator while Germany rode roughshod over everyone else and made all the decisions. To conclude the review we agreed to sell off all our public wealth and impose more of the same counter-productive measures. It makes no sense. Come September/October we foresee mass and dynamic reaction because it is then that the measures will start to kick in.” | “The Eurogroup was a fiasco for Greece. The government was just a spectator while Germany rode roughshod over everyone else and made all the decisions. To conclude the review we agreed to sell off all our public wealth and impose more of the same counter-productive measures. It makes no sense. Come September/October we foresee mass and dynamic reaction because it is then that the measures will start to kick in.” |
| Kalomoiros said the trade union now firmly believed the only way out for the debt-stricken country was to leave the eurozone. | Kalomoiros said the trade union now firmly believed the only way out for the debt-stricken country was to leave the eurozone. |
| 3.10pm BST | 3.10pm BST |
| 15:10 | 15:10 |
| Back with German finance minister Wolfgang Schäuble. According to Bloomberg he has said a fourth Greek bailout programme is not needed as of now. | Back with German finance minister Wolfgang Schäuble. According to Bloomberg he has said a fourth Greek bailout programme is not needed as of now. |
| 2.55pm BST | 2.55pm BST |
| 14:55 | 14:55 |
| Wall Street opens higher | Wall Street opens higher |
| As expected, US markets have followed their counterparts elsewhere and moved higher in early trading, partly buoyed by the Greek agreement overnight and continuing strength in the oil price. | As expected, US markets have followed their counterparts elsewhere and moved higher in early trading, partly buoyed by the Greek agreement overnight and continuing strength in the oil price. |
| The Dow Jones Industrial Average is currently up 124 points or 0.7% while the S&P 500 opened up 0.28% and Nasdaq 0.34% better. | The Dow Jones Industrial Average is currently up 124 points or 0.7% while the S&P 500 opened up 0.28% and Nasdaq 0.34% better. |
| The moves came despite some weaker than expected US services and composite PMI data. | The moves came despite some weaker than expected US services and composite PMI data. |
| [BREAKING] US Markit Services PMI May P: 51.2 (est 53; prev 52.8)-Composite PMI May P: 50.8 (prev 52.4) | [BREAKING] US Markit Services PMI May P: 51.2 (est 53; prev 52.8)-Composite PMI May P: 50.8 (prev 52.4) |
| Markit Flash U.S. Composite #PMI Output Index falls from 52.4 in April to 50.8 in May https://t.co/6Wwc4mI64S pic.twitter.com/aSKC3cAXNw | Markit Flash U.S. Composite #PMI Output Index falls from 52.4 in April to 50.8 in May https://t.co/6Wwc4mI64S pic.twitter.com/aSKC3cAXNw |
| US business optimism lowest since 2009 according to Markit services flash PMI respondents pic.twitter.com/vpgff4wLNy | US business optimism lowest since 2009 according to Markit services flash PMI respondents pic.twitter.com/vpgff4wLNy |
| Updated | Updated |
| at 2.59pm BST | at 2.59pm BST |
| 2.46pm BST | 2.46pm BST |
| 14:46 | 14:46 |
| Schäuble also said there were no major changes to the Greek bailout programme, according to Reuters, so there was no need for German parliamentary approval. | Schäuble also said there were no major changes to the Greek bailout programme, according to Reuters, so there was no need for German parliamentary approval. |
| #Germany finance minister #Schaeuble 'asumes' @HiBTag Budget Committee would back #Greece deal | #Germany finance minister #Schaeuble 'asumes' @HiBTag Budget Committee would back #Greece deal |
| Updated | Updated |
| at 2.47pm BST | at 2.47pm BST |
| 2.29pm BST | 2.29pm BST |
| 14:29 | 14:29 |
| German finance minister Wolfgang Schäuble has said last night’s result on Greece was a good one, and the next tranche of aid can now be paid out. But it looks like it’s not all sweetness and light with the IMF: | German finance minister Wolfgang Schäuble has said last night’s result on Greece was a good one, and the next tranche of aid can now be paid out. But it looks like it’s not all sweetness and light with the IMF: |
| "It wld have been helpful if the (IMF) managing director had been present.That wld have saved us a few hours,"Schaeuble says of Greek talks. | "It wld have been helpful if the (IMF) managing director had been present.That wld have saved us a few hours,"Schaeuble says of Greek talks. |
| Updated | Updated |
| at 2.30pm BST | at 2.30pm BST |
| 2.02pm BST | 2.02pm BST |
| 14:02 | 14:02 |
| Here’s a link to the transcript of the comments by Klaus Regling, head of the European Stability Mechanism, after last night’s Eurogroup meeting: | Here’s a link to the transcript of the comments by Klaus Regling, head of the European Stability Mechanism, after last night’s Eurogroup meeting: |
| Transcript of #ESM MD Klaus #Regling at #Eurogroup press conference https://t.co/fxmZ3XaHLs pic.twitter.com/CDOzoiGkoA | Transcript of #ESM MD Klaus #Regling at #Eurogroup press conference https://t.co/fxmZ3XaHLs pic.twitter.com/CDOzoiGkoA |
| 1.51pm BST | 1.51pm BST |
| 13:51 | 13:51 |
| Markets continue to be buoyed by the early morning Greek deal, although are now off their best levels. | Markets continue to be buoyed by the early morning Greek deal, although are now off their best levels. |
| Banks are among the main movers, both on the Eurogroup agreement and because a rise in US interest rates, which could come as early as June or July, is likely to bolster their balance sheets. | Banks are among the main movers, both on the Eurogroup agreement and because a rise in US interest rates, which could come as early as June or July, is likely to bolster their balance sheets. |
| In Greece, the Athens market is currently up 0.45%, while the country’s 10 year bond yields are down 8 basis points at 7.3%. Two year bond yields are currently down 87 basis points at 7.37%. | In Greece, the Athens market is currently up 0.45%, while the country’s 10 year bond yields are down 8 basis points at 7.3%. Two year bond yields are currently down 87 basis points at 7.37%. |
| Elsewhere in Europe, Germany’s Dax is up 1.4%, France’s Cac has climbed 1.1%, Italy’s FTSE MIB is up 1.3% and Spain’s Ibex has added 2.1%. | Elsewhere in Europe, Germany’s Dax is up 1.4%, France’s Cac has climbed 1.1%, Italy’s FTSE MIB is up 1.3% and Spain’s Ibex has added 2.1%. |
| Meanwhile the FTSE 100 is up 0.6% and on Wall Street, the Dow Jones Industrial Average is forecast to open around 73 points higher. | Meanwhile the FTSE 100 is up 0.6% and on Wall Street, the Dow Jones Industrial Average is forecast to open around 73 points higher. |
| European & US stock markets follow-through on yesterday's exceptional rise in equities as new Greek debt deal comes into focus. #stocks ^JC | European & US stock markets follow-through on yesterday's exceptional rise in equities as new Greek debt deal comes into focus. #stocks ^JC |
| Updated | Updated |
| at 1.55pm BST | at 1.55pm BST |