Analyse fra BNP Paribas:
Despite all the weakness over the week, Thursday evening headline is the key. According to Die Zeit, Greece’s creditors want to give the country a final offer by extending current bailout programme until end December. The programme extension would entail c.€10bn from the bank recapitalization fund to repay ECB and IMF.
The ECB would allow Greece to issue an extra €2bn in short-dated debt which can be bought by the Greek banks and then used as collateral against ECB funding. IMF would not be part of the programme. This was the headline. However, this was denied by another Bloomberg headline saying that Angela Merkel knew only about the existing deal with the IMF. So the situation remains a coin toss!
Even if the watered down proposal is true it still needs to be agreed by Greece and ratified by certain parliaments like Germany and Finland. However, the fact that Greek citizens prefer to have a deal and stay in the euro and are becoming increasingly impatient with the government gives some hope of a settlement but there is every chance of a referendum before Tsipras and team sign on the dotted line. There will be more headlines tomorrow and even this evening. The next key date (after tomorrow) is the Leaders’ Summit next week.
There might be an emergency EU leaders summit on 21 June but this has not been confirmed. The final deadline is not necessarily the end of the programme at the end of this month but the 20 July payment to the ECB as nonpayment could imply removing the life support of the ELA and hurtling towards a default.
Table 1: Key dates in the Greek calendar
18-19 June Eurogroup/Ecofin meetings in Brussels
19 June EUR 1.6bn T-bill redemption and c.EUR 0.3bn IMF loan redemption
25-26 June EU summit End-June Extension of Greek EFSF bailout programme ends End-June Greece to pay the IMF June loan redemptions of c. EUR 1.6bn 10 July EUR 2.0bn T-bill redemption
13 July EUR 0.5bn IMF loan redemption
17 July EUR 1.0bn T-bill redemption
20 July EUR 3.5bn government bond redemption held by the ECB
1 August EUR 0.2bn interest payment to the IMF 7 August EUR 1.0bn T-bill redemption 20 August EUR 3.2bn government bond redemption held by the ECB
Source: BNP Paribas, Bloomberg, Reuters Given all this escalation, we reiterate our view that the downside in Main because of Greece could be 85-90 as published in Credit Plus dated 19 February and we see no reason to change that view. While there will be some contagion and repricing we believe that we have come a long way in pricing Greece risk from c.50 when all of this started in February. In addition, we believe that the European recovery is firmly on track as also emphasised by Draghi and that the fundamental impact on Europe, and even the periphery will be contained. So we start cutting Shorts after 85 if we cross 90 we will start going Long Credit.
