US ratings agency out with their thoughts on the latest Greek deal 25 May 2016
- Eurogroup's decision to approve the disbursement of E10.3 billion to Greece "is a credit positive development".
- The Eurogroup also provided a road map on debt relief, which is credit positive as it signals a growing consensus among euro area member countries and the institutions, namely the IMF and the European Commission, on debt relief.
- Although the announcement doesn't provide specifics on the type of relief it is clear that material relief will be considered only after the program expires in 2018 and remains contingent on the Greek governments' ability to implement successfully the conditions associated with the program
"The deal alleviates the risk of a liquidity squeeze, especially in the near-term, as Greece's amortisation and interest payments from May to December this year total E7.5 billion"
But Moody's conclude:
"We consider implementation risks in Greece to remain high, given the small governing
majority, weak institutions, and the backdrop of political and social discontent."
Confirms my thoughts that yes the deal was welcome but there's still a lot of work to be done.
