As European leaders hold an emergency summit on Greece’s debt crisis, one expert said there’s renewed urgency to reach a deal, yet the markets have become too complacent about it. Thanos Vamvakidis, Head of G10 FX Strategy at Bank of America Merrill Lynch, doesn’t expect an agreement to be reached at today’s summit, but believes the Greek government’s latest proposals seem to be a step in the right direction. He said Europeans will need to evaluate the proposals over the next few days before deciding whether they go far enough. He expects there will likely be another summit later this week. But Vamvakidis said even if there is an agreement this week, Greece might not be able to pay the International Monetary Fund by the June 30th deadline, because the logistics of releasing funds takes time. ‘At least missing the payment while they have a deal is not necessarily a negative scenario because there is some flexibility. Greece will not be automatically in default to the IMF,’ said Vamvakidis. But he added if they miss the payment without any deal in place, a series of events would occur that would lead to sovereign default of Greek debt, which is why there is a sense of urgency about reaching a deal this week.
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