Thursday 19 October 2017

Athens, which has been resisting calls to extend its current bailout programme, is expected to request an extension of its loan arrangement today, to avoid running out of cash. The country's bailout concludes at the end of the month.

Greek crisis

Athens, which has been resisting calls to extend its current bailout programme, is expected to request an extension of its loan arrangement today, to avoid running out of cash. The country's bailout concludes at the end of the month.

What are the main obstacles to a deal?

Both sides - the Eurozone establishment and Germany in particular - and Greece have maintained entrenched positions. Greece wants to renegotiate its bailout, and, to avoid a short-term cash crisis, wants to use an alternative source of funding on a bridge basis. The Eurozone has been ruling this out, saying the best way forward is to simply extend the current bailout programme. Athens is saying no, because that would mean an extension of austerity, which it rejects.

Will this reported loan extension deal be accepted by Eurozone policymakers?

That's hard to say. Yesterday, Germany stuck to its tough line. Eurozone finance ministers may reconvene in Brussels, possibly as early as tomorrow, to discuss it if the extension is requested.

But, they may also say it's not enough.

The markets, however, believe a compromise will be found.

And if it isn't?

The powers that be won't yet answer that question.

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