Simone Foxman
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In general, however, everyone agrees that the eurozone is still the big disaster waiting to happen. That was even apparent in President Obama's budget plan, which suggested that a European catastrophe was one of the biggest risks to the American economy right now.
It seems we're nearing a crucial moment in Europe right now, with Greece closer than ever to default and EU leaders less willing than ever to mitigate the problems there. Are we about to jump off the precipice?
1.Wednesday, February 15
Eurozone finance ministers will hold a conference call to talk about
whether Greece's leaders have made sufficient commitments to austerity
with the newest round of austerity measures passed Monday.
This was initially scheduled to be an in-person meeting,
however this afternoon we learned that some leaders thought
Greece had not gone far enough towards accomplishing these goals.
When they met on February 9, they rejected Greece's commitments to austerity,
saying that these provisions must be written into law.
However, ministers were also skeptical that these cuts were sufficient
to reduce Greece's public debts to make them sustainable in the long term.
2. Friday, February 17
AP/Gero Breloer
German Chancellor Angela Merkel will meet Italian PM Mario Monti in Rome
for a "deep dialogue" on how Greece can receive the bailout aid
it has been promised under the second bailout.
Monti has waxed sympathetic to Greek leadership, and is also concerned
about how handling of the Greek situation will affect Italy.
3. Monday, February 20
AP/Michael Probst
Eurozone finance ministers will meet again in Brussels. If necessary,
they'll continue to debate the terms of the Greek bailout.
Also look for discussions of private sector involvement in the bailout
—and possibly a European Central Bank contribution—to heat up,
and some discussion on that matter will likely also come up.
4. Tuesday, February 21
AP/Daniel Olchoa de Olza
European Union finance ministers (the Ecofin) will meet in Brussels.
Expect them to continue the discussions on the Greek bailout,
and talk about the fiscal compact EU leaders announced back in December.
Last (and probably least), they will discuss the EU's budget for the coming year.
Notable here will be the differences in opinion between euro and non-euro EU representatives.
These have been growing larger of late.
5. Saturday, February 25
Group of 20 finance ministers and central bank governors will meet in Mexico City.
Depending upon the progress of a Greek bailout,
methods to restrain the effects of a Greek disorderly default could be a topic of discussion.
Also on the table will be efforts to increase the IMF funding available
to create a firewall against contagion in Europe.
Managing Director Christine Lagarde has said that she might be able
to wheedle more funding out of the fund's contributors if
eurozone countries increase their contributions,
however this remains unlikely and would not take effect for many months.
6. Monday, February 27
Stringer / AFP
The lower house of the German parliament, the Bundestag,
will vote on the new Greek aid package. (They might not be the only parliament
to vote on the plan, but this is one of the few dates that's firm.)
If the Bundestag fails to approve the deal, then Greece is pretty much on its own.
German representatives have been wary of doling out more money that they won't get back,
and while any decision handed down from Merkel is likely to pass,
margins are getting slimmer and standards are getting higher to shove such plans through.
7. Tuesday, February 28
The European Central Bank will hold its second,
highly anticipated three-year long-term refinancing operation.
In the first such operation in December, the banks requested
and received €489 billion ($643 billion) of funding at ultra-low rates.
Analysts are expecting a similar, if not larger, take-up in the second operation,
even though ECB President Mario Draghi said last month that
he expected the allotment in the second operation to be smaller this time around.
This operation also incorporates new rules that allow
French, Cypriot, Spanish, Italian, Irish, Austrian, and
Portuguese central banks to relax rules on
the collateral domestic banks have to offer up in return for funding.
The Irish Attorney General will also have to decide by this date
whether to schedule a public referendum
on the new EU treaty incorporating a financial compact.
8. Thursday, March 1-Friday, March 2
AP
EU leaders will hold their next summit in Brussels at the beginning of March.
They will try and stitch together the final details of what happens to Greece
later in the month when debts mature that it cannot pay off—
be it a bailout, a hard default, or perhaps even exit from the euro.
9. Tuesday, March 6
Greece means to complete the private sector bond swap by this date.
This is taking into account a lot of assumptions, however:
- Greek officials and private creditors can reach a deal on the debt swap.
- That deal is acceptable to a significant number of bondholders.
- There are no legal challenges to this deal.
Not only do we think the swap is unlikely to happen by this date,
we're not convinced that EU leaders can avoid provoking a credit event,
at least not without destroying the market for credit default swaps in Europe.
10. Thursday, March 8
AP/Riccardo De Luca
The European Central Bank will make its March decision on interest rates.
We'll be looking to hear more about the central bank's outlook on the eurozone economy,
and investors will probably be hoping for more activist measures:
another LTRO, true QE, losses on holdings of Greek bonds,
or perhaps even a commitment to stand behind countries' debts to prevent contagion.
(The last one would be a stretch, however.)
11. Monday, March 12
Eurozone finance ministers will meet again,
though it's too soon to tell which worries will be at the top of their mind at this point.
Likely, they will focus on Greece, which could be only days from having to default on its debts
if it does not receive aid in time.
12. Tuesday, March 20
This is the big day for Greece.
€14.4 billion ($18.9 billion) in Greek government bonds mature,
and they won't have the funds to pay off this debt without the next round of troika aid.
While they technically have a week-long grace period to actually pay off their creditors
(meaning the date of default could be as late as March 27),
we will probably know by this date whether Greece will be able to avoid a hard default.
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