EZA928/15Jan10: GREECE Greece – only indirect bail-out; government sets precedent for EU and IMF involvement
EZA928/15Jan10: GREECE
Greece – only indirect bail-out; government sets precedent for EU and IMF involvement
· Whereas the passage of an austerity budget on 24Dec ended the acute phase of the crisis, the efforts to restore fiscal sustainability will determine the prospects for Greek assets and the euro in the weeks ahead.
· The key issue will be burden sharing between Greece and the EU and the Greek domestic sectors in shrinking the deficit to the 3% SGP ceiling in 2012.
· The announcement of the IMF on 11Jan to advise the Greek government on fiscal sustainability implies that, next to the acute budget fix, structural issues will be tackled.
Asset conclusions: spreads of Greek bonds over Bunds assets likely to remain under pressure short term; but medium term outlook more positive as ultimate risk of default overblown.
Please see the attached pdf file to read onscreen or simply print and read at your convenience.
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john.arrowsmith@eurozoneadvisors.com
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