12 Feb 2015
Eurogroup comes close to agreement on Greece – TDS
FXStreet (Barcelona) - Richard Kelly, Head of Global Strategy at TD Securities, continues to expect an initial agreement at Monday’s Eurogroup meeting, followed by more agreement on principles by the end of the month that buys Greece the liquidity it needs.
Key Quotes
“For those who expect a clear agreement on the way forward for Greece in February, we will not have that. That is not anyone’s plan nor was it ever. This is merely about buying the time to have a detailed overhaul of the reform program over the coming months.”
“Buying that time requires cash in the interim. As we have discussed, given the renewed uncertainty, the new government has likely lost some of their cash cushion and because of that, could start to run short of cash following the February 24th coupon payments. So with four scheduled payments to the IMF in March totalling $1.5bn, that is where the tension lies."
“If there is an agreement with creditors before then, we have bought the months needed to roll over Greece while negotiations of what the new program will look like can be completed.”
“If there is no agreement, then we’ll likely see more brinksmanship.“
“Overall, we continue to expect some interim compromises by the end of February. We said we expected no agreement this week and that is exactly what we had.”
“[..]Greek and Eurozone leaders will have unofficial contact over the weekend to nail down a near-term compromise that provides those broad terms from Monday’s Eurogroup meeting, more agreement on principles by the end of the month that buys a liquidity reprieve to Greece and several months to work out the new way forward.”
Key Quotes
“For those who expect a clear agreement on the way forward for Greece in February, we will not have that. That is not anyone’s plan nor was it ever. This is merely about buying the time to have a detailed overhaul of the reform program over the coming months.”
“Buying that time requires cash in the interim. As we have discussed, given the renewed uncertainty, the new government has likely lost some of their cash cushion and because of that, could start to run short of cash following the February 24th coupon payments. So with four scheduled payments to the IMF in March totalling $1.5bn, that is where the tension lies."
“If there is an agreement with creditors before then, we have bought the months needed to roll over Greece while negotiations of what the new program will look like can be completed.”
“If there is no agreement, then we’ll likely see more brinksmanship.“
“Overall, we continue to expect some interim compromises by the end of February. We said we expected no agreement this week and that is exactly what we had.”
“[..]Greek and Eurozone leaders will have unofficial contact over the weekend to nail down a near-term compromise that provides those broad terms from Monday’s Eurogroup meeting, more agreement on principles by the end of the month that buys a liquidity reprieve to Greece and several months to work out the new way forward.”