Daily Forex Brief | From Greek tragedy to farce

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Daily Forex Brief London: Tuesday 1st November 2011
From Greek tragedy to farce Last week's EU agreement was just about holding together until last night, when Greece threw in the curven–ball of announcing a referendum on the deal. Many Greeks feel that the option of full default, letting the bond–holders take the full hit is better than the restructuring currently being negotiated and the years of austerity currently planned. But this puts the troika in a difficult position. Having just agreed the latest EUR 5.8bn loan instalment, it is now faced with the position of lending further money to a country that could potentially renege on the conditions of all the outstanding lending. Greece has EUR 8.2bn of maturing debt in December and EUR 15.1bn in Q1 next year. It would be totally irresponsible for the EU and IMF to disburse any more money to Greece whilst the potential for a rejection of the new EU/IMF deal is possible. Furthermore, the current administration has called a confidence vote for this week. In sum, despite its seriousness, the current situation is bordering on a farce of epic proportions and the reaction in financial markets (dollar firmer, stocks down) reflects this.
Also in today's Daily Forex Brief: RBA rate cut knocks the Aussie SNB less focused on the euro Trichet's failure to learn Read more...
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