Finance Chiefs Meet To Discuss Greek Aid, Bailout Extension
Financial market headlines over the next 6-weeks will be firmly focused on the so called "fiscal cliff" in the US. If the US congress fails to take positive action, by the end of this year, a wave of spending cuts and tax increases to the tune of $607 billion are due to kick in.
In the near term, however, the spotlight is also fixed on the subject of a Greek bailout extension once again. Latest reports show that a draft document due to be shown to Eurozone policy makers this week makes a recommendation that Athens be allowed another two-years in order to get its house in order and hit its budget targets. The suggested measures would add a staggering 32.6bn euros to the total bailout fund cost.
Greece is now chasing the latest tranche of funds after pushing through tight budget measures for the 2013 financial year. Approval of these cuts was rushed through, with a sense of urgency, for the 2013 budget by Greek MPs over the weekend with over 10,000 demonstrating outside of parliament in a protest against additional austerity measures. The head of the left-wing Greek opposition party expects the latest budget cuts could see many Greeks unable to afford basic items over the winter. The struggling country could run out of funds in a matter of days according to Antonis Samaras, the Greek PM.
Global markets experienced little in the way of changes on Monday, amid the Greece aid discussions, as the benchmark Standard & Poor’s 500 index rose by less than 0.1% to trade around 1,380.03 by 4 p.m. (New York).
This comes after the S&P 500 experienced the largest weekly basis decline last week since June. Today's EUR/USD analysis shows the key euro to dollar currency pair is near flat on the day and currently trading at 1.2709, as Forex markets have traded in tight consolidation ranges on this illiquid day. Events this week have potential to see additional market volatility though as the week progresses.