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The Greek shall not inherit the earth

The Greek shall not inherit the earth

As predicted there has been considerable dissent from within the Greek Prime Minister’s own camp as he returned to Athens in order to relay the details of the agreement made overnight on Sunday and began progressing the necessary actions to secure the funding. These are considerable and a tight deadline has been imposed, meaning that he must act quickly to be prepared for more voting from lender groups including the Bundestag (German parliament) that will ratify the funding under the conditions set out to Alexis Tsipras.

There has been talk from segments of the ruling Syriza party allies that they will not support the deal and believe the changes made to promises during election time are not ethical or constitutional. Tsipras was elected, you could argue, on promises that he was to end or at least draw to a close the savage austerity measures endured by Greece over the last 5 years and returning with a deal like this would be hard to swallow. From the outside looking in, yes he rebuffed better deals over the last few weeks and yes this was a particularly harsh negotiation but essentially the choice on Sunday was to allow the Greek banks to face a funding crises and begin printing a second, concurrent currency. A particularly apt comparison being made is to that of Greek King Pyrrhus who won a victory in battle, but one with such deep casualties that it was tantamount to a loss – a pyrrhic victory now being common to describe business deals that resemble this famous event.

Britain has been very clear that they would not support, or even entertain a conversation about, any use of the European Financial Stabilisation Mechanism (EFSM) that was established in 2010 as a bailout fund. Ireland and Portugal both have made use of this fund, but UK finance minister employee has made it clear that the British support for the use of this fund would be unacceptable and no talks about it should be revisited.

The warm weather in the UK has been a gift that keeps giving, boosting retail sales for June which were up 2.90% on the year and are the strongest since January. When we look to the wires today, we see a veritable smorgasbord of data to come. This morning, we have seen the German CPI figures, which came in as expected at -0.1%. Next of note we have a lot of GBP figures: the Producer Price Index, the Retail Price Index, the Consumer Price Index all indicators of inflation in various forms. Bank of England Governor, Mark Carney, will talk today as well after the UK Inflation Report Hearing. Then we expect US Retail Sales during the afternoon.

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