EUR: Today is pay day for Greece: the government in Athens will need to transfer € 3.2 bn
plus interest to the ECB. In addition, the bridge loan of a bit more than € 7 bn, which kept
Greece afloat for a few weeks until the adoption of the third bailout package, is also due
today. The ESM will pay out the first tranche today, as the Dutch parliament (which was the
last to vote) adopted the € 86 bn package last night. This first tranche will enable the Greek
government to make the payments mentioned above. Another € 10 bn will go to the bank
rescue fund to recapitalise Greek banks. The FX markets appear to think that, now that
Greece is receiving new support, all problems are over. In fact, they have been quite unconcerned
about the Greek situation since the ink has dried on the third bailout package. But
they should be. Not just now, but they should keep the issue in mind. It will resurface some
time in the future, at the latest when the next tranche is due. Then, the Greek government
will need to prove that it is implementing the harsh reforms which are part of the agreement.
If it does not succeed – and that is indeed a possibility, seeing that the situation in the Greek
parliament is quite difficult – the bargaining will start again. And even if the reforms are implemented, it is unclear whether there will be money for investments in the Greek economy
after all debt service to the creditors is paid. For the moment, the FX markets can certainly
put the Greek issue aside and focus on the Fed. But the Greek issue will resurface again
and again and weigh on the euro. [Commerzbank]