One of the puzzles of the Greek debt crisis is why the euro has hung in so strongly even as the crisis threatens the currency’s future. One potential explanation is something that’s being called Grangst.
Maybe the speech was part of an attempt to split the creditor group by attacking the IMF, which has been the most adamant of the creditors in demanding that Greece get specific about its plans for budget cuts and pension reforms. Maybe Prime Minister Tsipras thinks he can get the European Commission, marginally the creditor that seems to be most sympathetic with Greek demands, to broker a political deal without the IMF
Why, you might well ask (and probably have) am I spending so much time tracking the ins and outs of the Greek debt crisis? Because in the short run this is exactly the kind of scary venture into completely uncharted territory—no country has ever left the euro and in fact an exit was never even contemplated when the euro was put together—that can produce a panicked plunge in asset prices
Talks between Greece and its creditors collapsed in Brussels last night as Greek negotiators walked out after just 45 minutes. Creditor nations, and the International Monetary Fund, the European Commission, and the European Central Bank said that the newest Greek proposal was not a serious attempt to break the impasse.
After months of saying that there is no Plan B, government representatives preparing for next week’s EuroGroup meeting of EuroZone finance ministers put planning for a Greek default on the agenda for the first time
Today, the International Monetary Fund walked away from negotiations with Greece. Yesterday, Standard & Poor’s cut its credit rating on Greece to CCC just two notches above default.
European stocks—and the euro—were up strongly today on a belief that the German Chancellor has blinked in the showdown between Greece and its creditors
One indicator to watch is the percentage of stocks trading above their 200-day moving average. That figure has dropped to just 59%, the lowest level in eight months
