There is a 50% chance of Greek sovereign debt default in some form.
So says Stephanie Flanders, the chief market strategist for Europe at J.P. Morgan Asset Management. She writes:
“The way this latest round of the Greek crisis has been handled so far – by both sides – does not bode well. We believe there is now a 50 per cent chance of some form of Greek sovereign default. Carefully handled, a partial default does not have cause lasting damage to Greece or European markets. Nor does it have to lead to a Greek exit from the Eurozone. But at a minimum, investors should be prepared for a messy few months for Greek financial markets – and some potential volatility in other European markets as well …
Greece might or might not be able to fund itself through to the end of May, but the timeline shows there are plenty of IMF repayments looming after that. Without further external financing, it is inevitable that one or more of those will be missed. A missed payment to the IMF sounds like a sovereign default, and a default sounds a big step towards eventual “Grexit.” But the reality is not so clear-cut. If Greece misses a payment to the IMF it technically has 30 days to make good before the IMF considers it a default …”
Flanders provides the timeline below on Greek payment dates to worry about (the bailout expires June 30 and European Union leaders meet in late June.) In markets today, the Global X FTSE Greece ETF (GREK) is up 1.8%, while National Bank of Greece (NBG) is up 3%, Piraeus Bank (BPIRY) is up 6.8%, Eurobank Ergasias (EGFEY) is up 1.4%, and Alpha Bank (ALBKY) is down 1.2%.
| Date |
Event |
Payment due |
| 1-May |
IMF loans interest payment due |
€0.20bn |
| 6-May |
Governing council, ECB non-monetary policy mtg, Frankfurt |
| 6-May |
Greece to sell €1.4bn of 26-week T-bills to refinance maturing GTBs |
| 8-May |
Greek T-Bill (GTB) redemption |
€1.40bn |
| 11-May |
Eurogroup meeting |
|
| 12-May |
European Union finance ministers meeting |
|
| 12-May |
IMF loan repayment due |
€0.77bn |
| 13-May |
Greece to sell €1.4bn of 13-week T-bills to refinance maturing GTBs |
| 15-May |
Greek T-Bill (GTB) redemption |
€1.40bn |
| 20-May |
Governing council, ECB non-monetary policy mtg, Frankfurt |
| 3-Jun |
Governing council, ECB non-monetary policy mtg, Frankfurt |
| 3-Jun |
Greece to sell 26-week T-bills to refinance maturing GTBs |
| 5-Jun |
IMF loan repayment due |
€0.31bn |
| 10-Jun |
Greece to sell €1.6bn of 13-week T-bills refinance maturing GTBs |
| 12-Jun |
IMF loan repayment due |
€0.35bn |
| 12-Jun |
Greek T-Bill (GTB) redemption |
€2.00bn |
| 12-Jun |
Greek T-Bill (GTB) redemption |
€1.60bn |
| 16-Jun |
IMF loan repayment due |
€0.58mn |
| Source: J.P. Morgan Asset Management |
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