Euro group awaits Greek government's next move

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GREXIT
Euro group awaits Greek government's next move
The Nation, agencies

Asian markets slip after voters' resounding rejection of more austerity

BANGKOK: -- Euro-group ministers expect fresh reform proposals from Athens today after Greeks overwhelmingly rejected terms demanded by creditors in a national referendum on Sunday, which sent shock waves across European and Asian stock markets, with Thai shares down by 1.08 per cent.

Asian shares suffered their biggest one-day loss in two years, while Thailand's tourism industry is also expected to take a hit if the euro-zone economies face a greater impact from the Greek crisis.

Finance Minister Sommai Phasee is confident Thailand's financial system can handle the potential impact from a "Grexit" in which Greece could be forced to leave the 19-country euro group and print its own currency.

The SET Index fell from Friday's close by 16.12 points to 1,473.47 on turnover of Bt36.79 billion, while the baht weakened from 33.77 per US dollar on Friday to 33.82.

Sommai believes that the European Central Bank will continue to help Greece despite the "no" vote. He is more worried about a further slowdown of the Chinese economy than the prospects of "Grexit".

Pongpen Ruengvirayudh, deputy governor of the Bank of Thailand, said the escalation of Greece's debt crisis was posing major risks to the global economy, which could affect Thailand, but the impact would be minimal given the limited financial and trade links between Thailand and Greece.

Ittirit Kinglake, president of the Tourism Council of Thailand, said the impact should be limited since the number of Greek tourists is small, but if the European economic situation worsened, it would affect Thailand's tourism revenue.

Germany, the biggest euro-zone economy, insisted that the ball was in Athens' court if it wanted to stay in the euro, after Greece rejected creditors' austerity demands in a weekend referendum.

"It is up to Greece to make something of this. We are waiting to see which proposals the Greek government makes to its European partners," Chancellor Angela Merkel's spokesman Steffen Seibert said.

Euro-group ministers will meet today just before leaders from the euro-zone nations hold an extraordinary summit to decide the next way forward after the referendum.

Euro-group head and Dutch Finance Minister Jeroen Dijsselbloem called the victory of the "no" side "very regrettable", with Greece's place in the euro zone in jeopardy.

Ministers reacted strongly to the shock result, with hardliners insisting that any initiative to solve the crisis must come from the leftist government in Athens.

"The ball is now in Greece's court," wrote Finland's finance minister, Alexander Stubb, on his personal blog. "No matter what happens next, the consolidation of the country's economy will require extensive reforms."

Spain held to a more conciliatory line, with Economy Minister Luis de Guindos leaving the door open for talks on a third bailout despite the broken-down negotiations with Greece.

Greece "has the right to ask for a third rescue package. The Spanish government is open to these negotiations," he said.

Shares fell in Europe and Asia, the euro stumbled and yields on weaker euro-zone economies' bonds rose after Greece overwhelmingly voted against conditions for a rescue package, but there was no rout and contagion was limited.

Investors sought low-risk assets including Bunds, but the yield premium of Italian 10-year debt over Germany remained below the eight-month highs seen on June 29.

The euro lost half a per cent to US$1.1064 and 0.6 per cent against the safe-haven Japanese yen. It fell as low as $1.0967 in Asia before rebounding, taking some support from the resignation of Greece's outspoken finance minister, Yanis Varoufakis.

Some bankers, including JPMorgan, said the vote made it more likely that Greece would leave the single currency. Other investors said the European Central Bank's response would be key to the extent of contagion.

"The market is, rightly or wrongly, taking a great deal of credence of the fact that the ECB has many more defence mechanisms in place than it did in 2011-12," said Andrew Milligan, head of global strategy at Standard Life Investments.

Source: http://www.nationmultimedia.com/business/Euro-group-awaits-Greek-governments-next-move-30263910.html


-- The Nation 2015-07-07

[PepperMe]

I hope the EU dream falls apart and democracy is restored across Europe.

The troika are between a rock and a hard place.

This NO vote ensures that the creditors have already seen Greece's best offer and rejected it. Considering that Syrize were voted in on a pure anti-austerity ticket and the people are still with them, then any deal can ONLY be one of less austerity. However, the troika are trying to force more austerity, not less. So the deadlock is going to remain and who will back down first?....... Neither. Greece will leave the Euro and probably of her own free will.

The troiks have another spectre on the horizin. The markets to take the biggest hit (by far) across the EU were Spain and Italy, two other bailout countries. If Greece ends up coming good or if the troika gives in and agrees to ease austerity, then Spain and Italy will follow down the exact same path as Greece, and it could also include Portugal and Ireland. But when you consider how nervous and shaky the Eurozone and even the EU has become over just the Greek crisis, I can well imagine what the effects would be if the four other bailout nations followed suit.... Or even looked like they were thinking of it.

So..... Mr Juncker, Ms Merkel and Mr Hollande, looks like your empire is teetering.

[Pib]

This whole Greek thing is like watching a tennis match where no one can score any points....the ball just keeps getting hit back and forth...back and forth...back and forth....with hot tempered players and hecklers in the crowd.

[Ulic]

I hope the EU dream falls apart and democracy is restored across Europe.

The troika are between a rock and a hard place.

This NO vote ensures that the creditors have already seen Greece's best offer and rejected it. Considering that Syrize were voted in on a pure anti-austerity ticket and the people are still with them, then any deal can ONLY be one of less austerity. However, the troika are trying to force more austerity, not less. So the deadlock is going to remain and who will back down first?....... Neither. Greece will leave the Euro and probably of her own free will.

The troiks have another spectre on the horizin. The markets to take the biggest hit (by far) across the EU were Spain and Italy, two other bailout countries. If Greece ends up coming good or if the troika gives in and agrees to ease austerity, then Spain and Italy will follow down the exact same path as Greece, and it could also include Portugal and Ireland. But when you consider how nervous and shaky the Eurozone and even the EU has become over just the Greek crisis, I can well imagine what the effects would be if the four other bailout nations followed suit.... Or even looked like they were thinking of it.

So..... Mr Juncker, Ms Merkel and Mr Hollande, looks like your empire is teetering.

I don't really understand this ending austerity. I understand 1 in 3 Greeks are employed by the Greek government,

and there have been generous pensions for many of these employees with a retirement at age 50 for many. All is

good if you can get someone else to pay for it. The two Greeks working outside the Greek civil service and loans

from other countries that you have lied to, to get a seemingly endless supply of money. Eventually the truth comes

out. I am sure the foreign banks would not have lent as much money to Greece if the real numbers were known.

End result as I see it, if they can trick the EU into further loans there will be more austerity, and if you cannot

trick them you will have even more austerity. The re-structuring the EU wants will be even more severe as the

two Greeks working outside the civil service will not be able to pay for the 1 in 3 who are and the pensions.

So I expect things to get much worse before the eventually get better. After all necessity is the mother of change.

The Greeks will figure it all out eventually. The EU should write of the debt and leave the Greeks to sort out

whatever sacrifices they want to make. Let Greeks buy Greek bonds to show support for there government

and its ideas. Let them print as many Drachmas as they want to pay for the civil service and pensions.

No problems, up to them.

[churchill]

Over the last years few have been speaking the truth from Thatcher ..

Margaret Thatcher Was the ONLY Head of State Who Saw the Risk of the Euro

http://www.armstrongeconomics.com/archives/34510

to this day

Your moment has come, Mr Tsipras, take back control of your country - UKIP leader Nigel Farage