The Greek Bailout Explained: How to Protect Yourself - Two Scenarios
Thursday, February 19, 2015
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Greece's bailout expires at the end of this month. Athens needs to either secure a fresh bailout from its Eurozone lenders or find an alternative source of financing; otherwise, it is at risk of bankruptcy. Ahead of the bailout deadline on 28th February, Greece and the Eurozone finance ministers (known as the Eurogroup) have held talks, but a compromise has not been achieved.
How this may impact markets:
To help you plan your trading strategy around this important event, I've outlined some potential scenarios Greece may face in the coming days:
Two scenarios:
Scenario 1: Greece doesn't secure a deal: The next meeting between Athens and the Eurogroup takes place on Friday 20th February. If no deal is reached, then we could see volatility jump and the EUR sell off alongside European stocks.
Scenario 2: Greece secures an extension to its bailout: This would be the most risk-positive outcome in the short term as it would ensure that Greece has funds for the coming months. We may see a rally in the euro and European stock markets on the back of an announcement.
Greece's bailout expires at the end of this month. Athens needs to either secure a fresh bailout from its Eurozone lenders or find an alternative source of financing; otherwise, it is at risk of bankruptcy. Ahead of the bailout deadline on 28th February, Greece and the Eurozone finance ministers (known as the Eurogroup) have held talks, but a compromise has not been achieved.
How this may impact markets:
To help you plan your trading strategy around this important event, I've outlined some potential scenarios Greece may face in the coming days:
Two scenarios:
Scenario 1: Greece doesn't secure a deal: The next meeting between Athens and the Eurogroup takes place on Friday 20th February. If no deal is reached, then we could see volatility jump and the EUR sell off alongside European stocks.
Scenario 2: Greece secures an extension to its bailout: This would be the most risk-positive outcome in the short term as it would ensure that Greece has funds for the coming months. We may see a rally in the euro and European stock markets on the back of an announcement.
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