Just in under the wire -- Greece brought its proposal for a third bailout to creditors Thursday – something that should quiet the nerves of some clients here in Canada, say advisors.
The proposal, which was due at 10 p.m. GMT Thursday paves the way for a third bailout and could block the country’s exit from the European Union. A spokesman for the chair of the Eurogroup of finance ministers confirms the proposal has indeed been received.
The plan is to be pored over by eurozone finance ministers Saturday, just ahead of an EU summit scheduled for Sunday.
Details weren’t immediately available, but there is strong indication Greek PM Alexis Tsipras has consensus from his cabinet to overhaul parts of the nation’s tax and pension systems in the near-term. One unnamed source close to the talks suggests that Greece foresees €13bn of fiscal measures and €50bn in terms of a loan request..
That would cede to creditors demands following Greece’s decision to skip a scheduled 1.5 billion euro payment to the International Monetary Fund based on Sunday’s referendum.
According to a Greek government request leaked to the press, the government is seeking a three-year lending facility, an increase from last month’s two-year request.The Greek government owes 3.5 billion euros ($3.8 billion) to the ECB due on July 20.
Canadian investors have been relatively calm in the face of the EU crisis and the Greek move to fight back against the kind of austerity its citizens have lived under for the last three years.
“It’s been not an issue at all. I think a lot of people recognize that Greece makes up such a small portion of the world economy that they’ve had little fear of what’s going on there,” said Matthew Bishop of Worldsource Wealth Management. “As well, I think they’ve been prepared for it. It’s been six years since the first talk of problems in Greece have emerged so although its new news emerging, it’s not new news in the fact that they knew there was problems.”
“What’s more scary is the volatility in China. So, no, I haven’t had any clients mention this at all actually,” Bishop said.