After a “tense” meeting, Greece and the Eurogroup agreed a 4-month extension of the country’s bailout program, Eurogroup Head Dijsselbloem said in a press conference in Brussels.
The agreement removed the immediate threat of a Grexit and gave the new government breath space to negotiate longer-term debt relief with official creditors. Dijsellbloem says it's a matter of “rebooting” the agreement while discussing on “future arrangements.”
The Eurogroup released a statement with the main points of the agreement and said Greece authorities will present a first list of reforms measures on Monday, and then is up to the troika to approve if its sufficiently comprehensive to be a valid starting point for a successful conclusion of the review. This list will be further specified and then agreed with the institutions by the end of April.
Key points of the statement:
* Greek authorities have expressed their strong commitment to a broader and deeper structural reform process.
* Greek authorities reiterate their unequivocal commitment to honour fin obligations to all creditors fully and timely.
* Greek authorities commit to ensure appropriate primary fiscal surpluses.
* Greek authorities commit to refrain from any rollback of measures and unilateral moves, as well as reforms that would negatively impact fiscal targets, economic recovery or financial stability.
“Only approval of the conclusion of the review of the extended arrangement by the institutions in turn will allow for any disbursement of the outstanding tranche of the current EFSF programme and the transfer of the 2014 SMP profits. Both are again subject to approval by the Eurogroup”, read the statement. Here the full statement
Dijsselbloem said it was a tense meeting concerning important decisions and building trust between parts.
ECB ready to Reintroduce waiver for Greek collateral - Reuters
Meanwhile Reuters reported the ECB governing council was ready to reintroduce a waiver for Greek collateral when necessary steps were taken for the extension of the bailout and the bank decided that there was a "great likelihood" that Greece would achieve a "positive conclusion" to its rescue programme.
EUR unimpressed by the agreement
Meanwhile, EUR/USD rallied with the first headlines of an agreement but remained well within its weekly range. The pair reached a high 1.1429, before pulling back below 1.1400 as details of the agreement weren’t all that impressive.
“We have long been optimistic that an extension will be made and we still believe that both parties will reach an agreement to restructure Greek debt avoiding a Grexit but we along with the broader market are not happy that the can has been kicked down the road. There's still plenty of room for another screaming match, today's announcement fails to eliminate the risk of a Grexit and more immediately, Greek headlines will continue to affect how the euro and other major currencies trade in the coming week”, said Kathy Lien, analyst at BK Asset Management. “We are still waiting for Greece to come up with their list of reforms and for the approval from the EU”.
The agreement removed the immediate threat of a Grexit and gave the new government breath space to negotiate longer-term debt relief with official creditors. Dijsellbloem says it's a matter of “rebooting” the agreement while discussing on “future arrangements.”
The Eurogroup released a statement with the main points of the agreement and said Greece authorities will present a first list of reforms measures on Monday, and then is up to the troika to approve if its sufficiently comprehensive to be a valid starting point for a successful conclusion of the review. This list will be further specified and then agreed with the institutions by the end of April.
Key points of the statement:
* Greek authorities have expressed their strong commitment to a broader and deeper structural reform process.
* Greek authorities reiterate their unequivocal commitment to honour fin obligations to all creditors fully and timely.
* Greek authorities commit to ensure appropriate primary fiscal surpluses.
* Greek authorities commit to refrain from any rollback of measures and unilateral moves, as well as reforms that would negatively impact fiscal targets, economic recovery or financial stability.
“Only approval of the conclusion of the review of the extended arrangement by the institutions in turn will allow for any disbursement of the outstanding tranche of the current EFSF programme and the transfer of the 2014 SMP profits. Both are again subject to approval by the Eurogroup”, read the statement. Here the full statement
Dijsselbloem said it was a tense meeting concerning important decisions and building trust between parts.
ECB ready to Reintroduce waiver for Greek collateral - Reuters
Meanwhile Reuters reported the ECB governing council was ready to reintroduce a waiver for Greek collateral when necessary steps were taken for the extension of the bailout and the bank decided that there was a "great likelihood" that Greece would achieve a "positive conclusion" to its rescue programme.
EUR unimpressed by the agreement
Meanwhile, EUR/USD rallied with the first headlines of an agreement but remained well within its weekly range. The pair reached a high 1.1429, before pulling back below 1.1400 as details of the agreement weren’t all that impressive.
“We have long been optimistic that an extension will be made and we still believe that both parties will reach an agreement to restructure Greek debt avoiding a Grexit but we along with the broader market are not happy that the can has been kicked down the road. There's still plenty of room for another screaming match, today's announcement fails to eliminate the risk of a Grexit and more immediately, Greek headlines will continue to affect how the euro and other major currencies trade in the coming week”, said Kathy Lien, analyst at BK Asset Management. “We are still waiting for Greece to come up with their list of reforms and for the approval from the EU”.
