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2 Jun 2015
Greece to dominate Q&A - BAML
FXStreet (Guatemala) - Analysts at Bank of America Merrill Lynch explained that they expect themes related to Greece to be a key focus during the ECB Q&A.
Key Quotes:
"The ECB has so far stick to the rules and has supported the Greek banks with liquidity through the ELA. Draghi may have to address questions about the conditions for continuing such support, what would be the trigger to stop in a negative scenario, and what the ECB could do to help fund the Greek sovereign in a positive scenario, eg, allow issuance of more T-bills and disburse ECB profits from GGB holdings."
"As we have recently argued, the Greek government is running out of cash and payments to the IMF could be at risk in June. The first IMF payment is due on 5 June— €305m, followed by 12 June €312m, 16 June €573m and 19 June €340m. Greece could merge the four payments to one (for 19 June), but this is very rare and the Greek government has not requested it yet."
"Greece will have up to a 30- day grace period after missing an IMF payment before being officially in default. We do not see a deal without a credible fiscal consolidation plan and structural reforms, which could violate some of the Greek government’s red lines. We are therefore concerned about internal opposition in the Greek government against a compromise".
Key Quotes:
"The ECB has so far stick to the rules and has supported the Greek banks with liquidity through the ELA. Draghi may have to address questions about the conditions for continuing such support, what would be the trigger to stop in a negative scenario, and what the ECB could do to help fund the Greek sovereign in a positive scenario, eg, allow issuance of more T-bills and disburse ECB profits from GGB holdings."
"As we have recently argued, the Greek government is running out of cash and payments to the IMF could be at risk in June. The first IMF payment is due on 5 June— €305m, followed by 12 June €312m, 16 June €573m and 19 June €340m. Greece could merge the four payments to one (for 19 June), but this is very rare and the Greek government has not requested it yet."
"Greece will have up to a 30- day grace period after missing an IMF payment before being officially in default. We do not see a deal without a credible fiscal consolidation plan and structural reforms, which could violate some of the Greek government’s red lines. We are therefore concerned about internal opposition in the Greek government against a compromise".