Greece: Latest austerity measures should clear way for approval of new loans - Rabobank

Michael Every, Senior Asia-Pacific Strategist at Rabobank, explains that there was no blinking in Greece yesterday, where the government successfully passed another set of austerity measures to please its creditors, which should now allow Euro-area finance ministers to extend and pretend sign off on the official conclusion of the bailout reviews and approve yet another loan in order to allow Greece to repay EUR6bn in July.

Key Quotes

“Indeed, a further tapping of global bond markets --despite Greece’s crippling high-and-rising level of public debt, which the IMF has continuously flagged-- may even be on the cards later this year, apparently. The Greek economy, secondary to this giant game of financial pass-the-parcel, looks unlikely to benefit significantly from yet more public-spending cuts, at least based on the track record that these have had so far. Nonetheless, crisis postponed again, which is about the best we can usually hope for post-GFC – especially given politics is happily filling the gap where it can.”