International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Friday, February 13, 2015

Is Greece a "Dead Man Walking" or the Phoenix Moments Before Rebirth?

The British Bankers Association reports that negotiations between eurozone finance ministers over the Greek bailout programme broke down Wednesday.  Referring to the FT article (£, p6), the BBA reported that the failure: “appeared to dash the hopes of many in Brussels that a deal could be reached on at least a “technical” extension of the current bailout at the end of the month. Instead, Athens is now likely to head into March without any bailout assistance for the first time in nearly five years — an outcome that many in Brussels worry could spark market turmoil and potentially a run on deposits at Greek banks.”

The Guardian (p25) quotes German Finance Minister Wolfgang Schäuble saying: “We have a programme. The programme is either brought properly to an end or there is no programme.”

But on Thursday afternoon, Reuters reported that "Greece agreed on Thursday to talk to its creditors about the way out of its hated international bailout in a political climbdown that could prevent its new leftist-led government running out of money as early as next month."

NY Times Deal Book reported - In Germany, the view now is that such a situation does not pose a broad financial danger. Following the debt restructuring in 2012, 80 percent of the Greek debt is owned by public sector creditors, with banks and investment funds having a small exposure by comparison.

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