Dr. Platon Monokroussos, Chief Market Economist, Deputy General Manager, Eurobank Ergasias S.A
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: European bourses were significantly lower in early trade on Monday, following the Greek government’s announcement for imposition of capital controls in the wake of the ECB’s decision yesterday to maintain ELA to Greek banks at its current levels (ca €90bn). This follows the Eurogroup’s announcement on Saturday that it rejects the Greek government’s request to extend current program and the government’s decision a day earlier to hold a referendum on July 5th on whether citizens accept the draft staff level agreement which was submitted by the Institutions to the Eurogroup of 25 June 2015. In FX markets, investors’ Greece-related worries drove the EUR lower against most currencies, with the JPY being among the main outperformers on their perceived safe-haven appeal.
GREECE: In an extraordinary session on Saturday, the Hellenic Parliament endorsed the government’s motion to hold a referendum on Sunday 5 July regarding the acceptance or rejection of the draft staff level agreement which was submitted by the European Commission, the European Central Bank and the International Monetary Fund to the Eurogroup of the 25 June 2015.
SOUTH EASTERN EUROPE
BULGARIA: The Bulgarian National Bank said in a statement issued at its website on Monday that the measures applied on the Greek financial system “have no legal effect in Bulgaria and can in no way whatsoever affect the normal functioning and the stability of the Bulgarian banking system”.
ROMANIA: In a statement issued upon the conclusion of a staff mission to Romania, the European Commission said on Friday that “important steps have been taken in some areas and the macroeconomic situation is strong. However, the overall progress in implementing the jointly agreed policy measures has not been sufficient, predominantly in relation to fiscal policy, to allow for a staff-level agreement with the Romanian authorities.”
SERBIA: According to a statement released at the IMF’s website on Friday, the Executive Board completed the first review of Serbia’s economic performance under the 3-year €1.2bn Stand-By Arrangement (SBA).
CESEE MARKETS: Most emerging market assets kicked off the week on a negative footing amid heightened concerns on the Greek issue.
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