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Greek “red lines” fade away

Published Friday, July 10th, 2015

Sustainability was undoubtedly yesterday’s Word of the Day. Specifically, debt sustainability, as calls grew louder that Greece’s debts which have swelled to a colossal 180% GDP would eventually have to be restructured. Donald Tusk, the President of the European Council, joined the US Treasury Secretary and the IMF in stressing the need for an element of debt relief. Even Germany’s hard-hitting Finance Minister Wolfgang Schauble admitted that Greece would need a debt haircut but quickly pointed out that this was forbidden under EU rules.

A notable omission from the debt relief bandwagon was ironically the Greeks who late last night put forward an eagerly-awaited package of economic proposals in a last ditch effort to safeguard its membership to the eurozone. Not only was there no mention of debt forgiveness, Alex Tsipras appeared to give in to creditors’ demands as resistance over “red lines” faded in what was an admission of the harsh choices the embattled country faces. The sudden change of heart by Alex Tsipras prompted resistance from more left-leaning members within Syriza but attention will now turn to this weekend where Greece’s final offer will be evaluated and ultimately determine whether it remains in the currency-bloc come Monday.

Prospects of Greek concessions and an eventual deal along with a rebound in China’s financial markets helped bolster risk appetite and propelled global stock indices higher. Ongoing efforts by Beijing to stem losses on its equity bourses were yet again apparent as the Shanghai Composite ended a tumultuous week on a firmer footing with a 5% overnight gain. Claims of order having been restored were however premature with restrictions on selling currently in place and over half of all company shares still suspended

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.