The Greek government and international lenders are again unable to make progress in the negotiations on the evaluation of the reform program. If the parties do not find a compromise, this will prevent Greece from obtaining a new loan.
Greece and international lenders again cannot agree, the solution of the most difficult issues can be postponed, reports Reuters referring to sources. Among the unsettled issues there are labor and pension reforms, fiscal policy and privatization. On all of these points, there are still disagreements among European creditors and Greece.
Thus, the lack of progress at the technical level means that the finance ministers of the eurozone are unlikely to reach a political compromise on a new loan for Greece at the next meeting in Brussels. Thus, Athens may not receive financial assistance amounting to 86 million euros.
At the same time, Greece hopes to resolve the disputed issues before the next meeting of the Eurogroup on March 20th to get a positive second assessment of the reform progress. Without this, the country will not be able to receive loans under the assistance program in the amount of 86 billion euros needed to service the public debt.
It is also expected that due to ongoing reforms after a seven-year recession, Greece’s economic growth this year will be 2.7%.
At the same time, the Greek banking sector has serious problems: financial institutions are rapidly losing their capital.
The ECB warns: if the situation does not change, the sector is about to face major shocks.
The population tries to bypass the control over the movement of capital and withdraws money from the banking sector. According to the representative of the European Central Bank Daniele Nouy, “bad” loans represent a serious problem for Greek banks.
What do events in Scotland mean for the pound?
It seems that in Scotland the second referendum for independence is going to take place, and this affects the pound, which has reached its minimum since January.
According to the first Minister of Scotland, Nicola Sturgeon, “the country needs a choice as to whether to follow Britain in the process of tough Brexit, or become independent and conclude partnership relations on an equal footing with Europe”.
Sturgeon intends to hold a referendum on independence between the fall of 2018 and the spring of 2019, even before the end of negotiations on Brexit.
“The majority that Prime Minister Teresa May has in parliament will enable her to reject or postpone the referendum in Scotland, but if she takes a tough stance on this issue, the supporters of independence in Scotland will increase”, notes Christian Schulz, an economist at Citi.
The pound briefly reached a 10-week low, $ 1.2109, on Tuesday.
“Following Sturgeon’s declarations and approval of the official withdrawal procedure by the parliament, the demand for sterling has fallen”, said Lukman Otunga, an analyst at FXTM.
If the currency falls below $ 1.21, the path to $ 1.20 opens, he believes.