The key event this week will be the beginning of the Troika (observers from the European Commission, IMF and ECB) review of Greece following the two rounds of Greek elections, according to Richard Barwell, Senior European Economist, and Michael Michaelides, European Economist, at RBS.
They explained that “a spokesperson for the Commission reaffirmed today that Greece will not be getting the next aid tranche any time soon: ‘We are confident that a decision on the next disbursement will be taken in the very near future although it is unlikely to happen before September”. The fact that the next loan tranche will not arrive until September has brought to the fore the EUR 3.15bn redemption of Greek government bonds (held by the official institutions). A spokesperson for the Greek finance ministry confirmed last Tuesday a bridge loan had been sought. “As noted in last week’s Euro Crisis Monitor EU members seem reluctant to provide such a loan and we continue to think further bill issuance is a more likely solution.” They explained.