Wall Street opened lower on Wednesday as investors anxiously await news from an emergency meeting of 20 finance ministers from various European powers.
Wednesday, February 11, 2015
Initially, rumors emerged that Greece might receive a 6-month bailout program extension, but German Finance Minister Wolfgang Schäuble denied that possibility on Tuesday. The current bailout plan terminates on February 28, but some analysts are concerned the nation may default before then. “Commentators generally seem to believe that the Greek stance in the talks is unworkable, so that the risk of outright disaster is still growing, but markets are priced for some kind of stopgap-funding deal for Greece, which allows the ECB to continue financing Greek banks and lets talks continue,” Kit Juckes, a strategist at Société Générale, told MarketWatch.
In Europe, the Stoxx Europe 600 was down 0.29% in early trading. Greek stocks fell 3.5% during the emergency finance ministers meeting. US stocks fared marginally better in Wednesday morning trading. The S&P 500 fell 0.11% and the Dow declined 0.3%, while the Nasdaq moved up 0.14%.
Inside the emergency finance ministers meeting
Greek Finance Minister Yanis Varoufakis of the recently empowered Syriza party faces the difficult task of selling other eurozone finance chiefs on the strength of the Greek finance plan, reported The Wall Street Journal. Varoufakis’ plans include walking away from the €240 billion bailout from the currency union and International Monetary Fund.
Many finance ministers are overtly against Greece’s plans. Schäuble asserted no new program was imminent and that finance chiefs will hear only binding proposals from the Greek representatives and nothing more.
To be sure, Greece needs a bit of fortune and cooperation to avoid defaulting on its debt. The nation must repay €4.7 billion in Internationals Monetary Fund loans and €6.6 billion in ECB and national central bank bonds between the end of March and beginning of August. Then there is the interest owed to private creditors, the €13.4 billion in Treasury bills, and so on.
Still, a new poll in Greece showed that 8 in 10 approve of their government’s negotiations. That support makes it easier for Varoufakis to hold his ground and seek a better course of action.
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