Before EU could even discuss the approval and give the go ahead for the next Greece Bailout Tranche disbursement, Greece must first negotiate with Troika on new budget and austerity plans, then pass said plans through its own parliament. Of course, EU must also review the official report from Troika (EU/IMF/ECB), but usually if Troika recommends disbursement, then most likely EU will foot the bill.
So far Greece has successfully passed both austerity (153 out of 300) and new budget (167 out of 300), with the latter just at the beginning of the week, paving the way for EU to release the next tranche of payments this week. With pressures mounting high for Greece due to a major bond redemption scheduled on the 16th for €5Billion, it is uncertain if Greece could avoid a default, if it does not receive the €32B of bailout fund soon. Here’s an analysis:
There are some speculation that ECB may raise the collateral ceiling for Greece on a temporary basis, but so far ECB has made no announcement… I believe ECB may also be counting on the bailout disbursement, but will step in at the last minute to save the day…
As far as the possibility for approval, here’s what EU Juncker said today:
In conclusion, I believe it is in the best interest for Europe to release the bailout soon, as Juncker said, although the comments on “no definitive decision” is just Juncker being politician, because Greece will get the next tranche of payment in time before the bond redemption, and EURUSD will probably rally as a result… although I must warn you that I believe the rally may be temporary, as the overall sentiment still remains bearish for the Euro as a whole…
When Will Eurogroup Approve The Next Greece Bailout Tranche?
November 12, 2012 by Leave a Comment