Last minute deal for Greece
A last minute deal has been cobbled together for Greece in an all-night negotiation to keep them in the Eurozone. It was a unanimous agreement that represents some pretty heated feelings and arguments on both sides. Greek Prime Minister, Alexis Tsipras, was forced to accept some very tough concessions in reaching an agreement, imposed particularly by main funding contributor Germany’s Angela Merkel (who has had some growing German anti-bailout sentiment to contend with).
A major sore point for Greece will be the key point for Germany that renders some EUR 50bn worth of Greek state assets forfeit to pay down debt. A provocative statement from one diplomat said that this would be like turning Greece into a ‘German protectorate’ and diluting further it’s sovereignty. While not all the details of the conditions to the loans are known, it is widely expected that Tsipras will have a great deal of resistance and opposition to contend with now that he must return to rush the policies through in order to meet the conditions of the loans. I expect there will be a significant shake up of his cabinet in the days and weeks to come. One unhappy point is that he now has accepted a worse deal than that which he denounced and rejected at least twice in the last few weeks.
There has been a further resurgence in the Chinese equity market, perhaps pointing at an improvement in global demand. Oil prices falling have supported airlines and other significant energy users, but there are warnings that we are far from out of the woods yet on a recovery. Chinese GDP is coming on Wednesday and this is forecast for 6.9% which puts continued pressure on them to reach their annual goal of 7%.
Today we have very little as far as economic data to receive. We saw the Chinese trade balance this morning, which was not as good as was expected. But the Chinese Export and Import data points to a strong performance for international trade for them. Later during the day today we have a credit conditions survey for the UK and this is particularly interesting for our readers, so worth reviewing once it is available. And then to conclude the UK sees a Retail Sales Monitor to show the change in value for retail sales in the country.