Notable Deal To Keep An Eye On
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Greek is the foremost thing on everybody's mind. Markets from all around the world are closing watching the developments concerning the Greek deal. It will have repercussions on both the sides- up or down on the markets. Euro and USD have discounted the developments on Greek deal in their values periodically. It is in your interest to keep an eye on the developments. Recession in Greece Greece is suffering from the recession for the past five years. In the past, Greece has accepted the bailout package and also had agreed to austerity measures. In return as a bailout package, European countries along with International Monetary Fund had asked for reforms. But Greece has failed to bring in the reforms as per the expectations of the creditors. This time when second bailout package is being delivered, stringent austerity measures are demanded by other European countries. Important Payment in March The proposed bailout will consist of 130 billion Euros. Greece has to pay tranche of money during the month of March. Without the bailout, Greece will be unable to honor the payments in March. A default by Greece will bring catastrophic effects on the world. Spiralling effects will be seen. When a country defaults it historically has pushed the economy on the edge. It will push the whole economy to the brink of collapse. Obstacles in front of Greek Politicians There are genuine concerns of people on both sides of the deal. Greece is going into the elections this April. The bailout means more stringent measures on the Greek people in terms of more taxes, relaxation in minimum wages, increase in taxes, lay offs in jobs and retirement benefits. Considering the polls, it will be a tough task for politicians in Greece. Unions are coming on the streets against the proposed austerity measures. Stringent Demands of European Leaders European leaders on the other hand have demanded that Greece will adhere to its commitment towards reforms. The polls in April have worried the creditors. The creditors demand that reforms should be the priority of any government which comes into the power. Hope Lost with Delay It is important that the deal is finalized as early as possible. Talks in the past few days have seen some positive developments. But nothing concrete has emerged from the talks. The 14.5 billion euros payment in March is not possible without the bailout package. Finance ministers from different European countries will gather next week. An agreement will have to be reached by then. It is economic as well as a political issue. In response to the events, Euro swung between 1.3200 and 1.3000. Euro broke an important level of 1.3200 on the upside four times on the hope of Greek deal going through. But it was unable to break the resistance of 1.3230. If the deal goes through the single currency can touch the 1.3400 levels. If the stalemate continues, the Euro can see 1.2500-2600 areas.