Spain – Greece
The recent concerns relate to the large bond redemptions that took place in July 2017 (6.200 billion EUR) which are only partially covered by public deposit holdings, estimated at 5.900 billion EUR.
The political deadlock among international institutions appears to be easing only slightly. The Eurogroup meeting on February 20 suggested that the teams will assess possible avenues for implementing new structural measures. There seems to be a consensus that maintaining confidence is key to Greece's economic performance and, therefore, to its fiscal targets. As a reminder, the IMF indicated that the fiscal targets set by the Europeans are unrealistic without nominal debt reduction or new measures. The recent short-term debt relief measures approved in January, aimed at reducing the interest burden, are certainly positive, given that 80% of Greek debt is held by institutions, primarily European, and that principal repayments will not begin before 2034. We believe a compromise would be to accept the IMF as a technical advisor rather than a financial contributor, since Greece's financing needs are substantially lower than anticipated (a maximum of €65.000 billion compared to the agreed €86.000 billion).
Source: Solunion
Weekly Export Risk Outlook – Euler hermes
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