Partner Article

Still waiting for Greece

As with yesterday, European markets took their lead from the US and Asia overnight ensuring
they opened up modestly higher. It follows the postponement of a key meeting between the
leaders of the three main political parties until today, and despite another missed deadline markets
appeared confident that Greece was close to a deal. Supporting the mood were concessions
from the ECB which agreed to exchange the government bonds that it purchased last year in the
secondary market at a price below their face value, if the private sector debt talks reach a successful
agreement. Whilst it is still unclear as to whether the ECB would make a profit or loss on its holdings
(remembering it bought the bonds in the market at well below their face value in an effort to
support Greek access to capital markets), the concessions could free up an extra €11 billion for the
Greeks. This can be seen as a step in the right direction for most private sector creditors who had
previously met resistance from the ECB who were insistent on profiting from their holdings as others
suffered substantial losses.

The Greek coalition had in their possession the draft agreement with the finalised terms of the
Trokia bailout package by early morning, although at 60 pages long, it was expected that today
was likely to be a waiting game. The bailout plan is anticipated to be put to a vote in the Greek
parliament on Sunday. There was no news from Greece whilst the market was open, and the
FTSE100 drifted lower throughout the day to close around at its lowest level, off nearly 16 points to
5874. There was no major news affecting currency markets or commodities.

This was posted in Bdaily's Members' News section by John Dance .