Greece Endgame Not Here Yet

We continue to expect Greece and its creditors to 'muddle through', but eventually reach a compromise, and we see only a 30% chance of eurozone exit. Either way, a resolution now looks at least a few weeks away.

On June 5, one of the big deadlines – a scheduled EUR306mn payment to the IMF – ended up with Greece telling the Fund that it would delay paying until the end of June. The country has invoked a rule allowing it to bundle all of its four June payments owed to the IMF together (over EUR1.5bn) until the end of the month. The move will give both Greece and its creditors more time to discuss the reforms the country needs to agree on to unlock the final EUR7.5bn tranche of its bailout. Greece has suggested that it has sufficient cash reserves to have made the payment on time, which implies that the delay is a political move designed to get better terms for Greece. It means any potential 'endgame' in the talks has been pushed back by a few weeks.