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Crude in distress

Published Friday, June 26th, 2015

It would seem that we can genuinely say that the coming weekend is the decisive make or break two days in the Greek debacle. The eurozone is confronting its Lehman’s moment. Stick or twist. Make no concessions to Greece and stick will lead to either an immediate crisis, or just  a short term shudder with the boil lanced and long term relief. Twist without debt forgiveness will give short term relief and long term anguish.

Angela Merkel has said there must be deal or no deal by the time markets open on Monday and repeated that the eurozone “will not be blackmailed by Greece”. Greece has been given a take it or leave it offer by the eurozone which it must sign up to with the approval of its parliament by Monday. If it does not sign up it will not be given funding to pay the IMF €1.6bln on Tuesday and the ECB will stop providing emergency liquidity assistance to Greek banks.

Greek banks may or may not re-open on Monday. There may be capital controls in place by Monday. The most likely outcome is that Greece will not sign and a new election or referendum will be called to put the issue before the Greek people. August 2nd is the date being mentioned. What will happen in such an event is unclear. Will Greece be officially bankrupt, semi-bankrupt or in bankruptcy abeyance?

to read the rest of the report, please click here

Posted by David Hufton