5 June & Greece – mark your calendar

After reading the AFR today you could be excused for thinking all will be OK on the Greek debt saga and that it could be resolved within a week.  Lets hope that is the case but history would dictate otherwise as the parties have not agreed after many months of negotiations and Greece finds new and innovative ways to find the funds to meet each repayment deadline.  What the AFR omits is that yesterday Reuters reported that senior Syriza party lawmaker Mikos Filis said Greece has no more capacity for such payments and is simply unable to pay the next tranche on 5 June stating "Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5,".  Per our last article on the Greek debt situation they only made the last payment by withdrawing emergency funds from the IMF to pay the IMF.  

June takes on double significance with Greece as it is also the month NATO, of which Greece is a party, votes on whether to continue sanctions against Russia, a vote that must be unanimous.  Russia is reportedly courting Greece with a cash deal to allow it to continue its proposed “Turkish Stream” natural gas pipeline through Greece, cash it could greatly do with.

And whilst this situation has the country in uncertain gridlock an average of 59 small businesses and 613 jobs have been lost every single day since Syriza took office and with GDP dropping a full quarter it’s at a time that it has seen the worst depression in the developed world since 1930.  Throw in a 3rd of all bank loans classified as “bad” and over 95% of bank loan applications rejected you get a clear picture of the basket case being dealt with here.

This of course comes at a time when global debt and derivatives are at chronic proportions, interlinked globally, and the bubble prone to a rogue prick like, say, a sovereign state defaulting on $350b of debt….