The IMF brought their threats into realization and pulled out of the negotiations about Greece’s debt. This cause turbulence on the stock markets, but not as big as it could’ve been, because there were speculations pointing towards this outcome for a few days now. Euro got weaker because of this, and the U.S dollar got stronger thanks to a research that shows that the United States economy is getting better by the day.
Official Athens attitude changes rapidly, from “ready to accept “to “our pride comes first “, so the deadlines they got from the creditors months ago, have already passed. Greece needs for the euro zone to release bailout funds, but doesn’t do what is asked from them – according to the chief of the European Commission Jean Claude Juncker. In the meantime, the government in Athens works with change cash that they can still find in the budget.
Although analysts projected that an eventual failure in the negotiations and a default by Greece could only mean their slow departure from the euro zone which could hurt the euro currency, it is being held up against the US dollar.
Ian Standard, head of European FX Strategy in London says: “The stock markets try as hard as they can to be far from the Greek question and untouched by it on daily basis, but that is simply impossible. It just keeps coming back onto the radar. For a few weeks, Athens is asking for the deadlines to be postponed, but that didn’t happened, so now it is something of a D day for them. A deal must be made, and must be made fast”.
Greece’s decision may be to default on the 1,6 billion euros repayment to the creditors and the IMF at the end of June. This could eventually take them out of the euro zone, and bring unpredictable consequences for the European economy.