11th hour solution to Greece expected by Julius Baer
Greece is searching for cash that could give it time to continue discussions with creditors but it is unlikely it will be enough to cover domestic obligations and the bundled €1.7bn payment to the IMF. Creditors are getting tired with the negotiations; we expect a solution to be reached but only at the last moment.
After just 45 minutes, talks between Greece (Sell/Speculative) and its creditors collapsed in Brussels last night. The gap between the two sides still remains unbridged and the focus now shifts on the 18 June Eurogroup in Luxembourg. While the International Monetary Fund (IMF) returned to the table, Germany officially warned that Greece is increasingly risking its eurozone membership as time is running out. Greece still needs to reach an agreement in order to receive the remaining €7.2bn of bailout funds and Sunday was regarded as a deadline that would allow the various eurozone parliaments enough time to ratify the decision of disbursing the funds. As Greece is also running out of money, the Greek government is again asking pension funds and local governments to deposit their available funds with the Central Bank of Greece in order to ensure the timely payment of pensions and salaries at the end of the month.
Eirini Tsekeridou is a fixed income analyst at Julius Baer