Bailout negotiations between the Syriza-led Greek government and Eurozone officials have featured prominently this week. A last-minute tentative deal was announced on Friday to extend Greece’s bailout for another four months pending a formal evaluation of the Greek government’s reform proposals, which in turn have been criticised by officials for their lack of detail. As a result, Greek Finance Minister Yanis Varoufakis and his team worked over the weekend to produce a revised list of budgetary measures for a review by Greece’s creditors, namely the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF). If officials are satisfied with the amended proposals, the bailout extension will be ratified. However, if doubts remain, it could prompt another meeting in Brussels later this week. German Finance Minister, Wolfgang Schäuble stated that Syriza will have a difficult time explaining the extension deal to their voters as it refutes Greek Prime Minister Alexis Tsipras’s declaration that that the bailout was “dead” along with the control of the EC, ECB and IMF, collectively known as the “Troika”.
Greek banks have experienced significant withdrawals recently and the hope is that, if approved, the bailout extension will avert an imminent bank run and sovereign bankruptcy. Interestingly, whilst the Greek stock market has been weak and extremely volatile, major international bourses have thus far been relatively robust. The FTSE 100 index, for example, has recently climbed close to its all-time high.