Fra Guardian kl. 14.30>
Greek officials are sitting down with their creditors in Brussels for another round of talks over the country’s reform plans, as time continues to run short.
Greece had been expected to present a final programme by today. But after a weekend of talks on the proposals submitted on Friday, Athens appears as far away as ever from receiving any of the €7bn of bailout funds that are outstanding.
Germany has insisted that Greece has not yet presented adequate plans, and cautioned that money won’t be released until reforms have been approved by the Athens parliament.
The Commission says that talks are continuing in an attempt to reach a credible and comprehensive conclusion.
Without a breakthrough, Greece is still expected to run out of funds in April.
Ilya Spivak, Currency Strategist, at DailyFX, explains:
“Investors fear that if external funding is not secured, a cash crunch and subsequent default may lead to the country’s exit from the Eurozone.
Such an outcome would be unprecedented, carrying with as-yet unknown implications for the financial markets at large.
Members of his own Syriza party sound increasingly concerned about the situation, and unhappy that measures including privatisating Greece’s Piraeus Port are going ahead.
Greece is proposing around €3bn of new tax revenue – partly from fighting tax evasion, and partly from raising VAT rates on Greece’s island and through a property tax he’d vowed to abolish. Its lenders, though, are concerned that the government is still not delivering reforms on pensions and the labour market.
The uncertainty has weighed on Greek bonds today, pushing yields higher.
On the economic front, though, the picture is brighter – witheurozone economic sentiment hitting a 44-month high.
And the eurozone’s flirtation with negative inflation may be ending – Germany’s CPI has turned positive, while Spanish prices are falling at a slower rate.
