Now that the Greece situation looks like it might finally be nearing resolution, there's lots of hand-wringing about what will happen next. The fact that no one really knows is not helping to set minds at ease. As nor are memories of the last time governments intentionally allowed a major financial player to fail — namely, the US investment bank Lehman Brothers in the fall of 2008.
After suffering a bleak start to the year, National Bank of Greece (NYSE:NBG) saw its share price escalate to almost 25% in early trading. The boost that the $5.7 billion aid program brought was much needed, as the bank was down almost 10% earlier this week. The election of an anti-bailout government, and a prospective step-down by both the CEO and chairman, sent the stock crashing Monday to almost $1.1.
Greece became the first country to defer a payment to the International Monetary Fund since the 1980s as its game of brinkmanship with creditors goes down to the wire.
With Prime Minister Alexis Tsipras getting ready to address parliament on Friday after receiving a list of creditors’ demands, the step underscores the state of the country’s shrivelling finances. While international officials have reported some progress in recent days, German Chancellor Angela Merkel said “we’re still far from reaching a conclusion.”
BRUSSELS: German Chancellor Angela Merkel said on Thursday everything must be done to prevent Greece running out of money before it reaches a cash-for-reform deal with its international creditors amid heightened concern that Athens is nearing the brink. Merkel, Europe's pre-eminent leader, was speaking after a meeting she called "constructive" with Greek Prime Minister Alexis Tsipras on the sidelines of a European Union summit in Brussels. She said they had agreed to keep the contents of their discussion confidential.
The euro recouped ground on Thursday on signs officials were nearing a deal to bailout Greece with the help of the private sector, although some players were unnerved by the prospect of that including a short-term default.
A standoff between Greece and its euro-zone partners over the timing and terms of a potential rescue is nearing a crucial juncture as the cash-strapped country faces a key test of investor willingness to keep funding its ballooning deficit.