Greece and lenders will agree on bailout exit in June

Significance

The debt relief issue was pushed to “the end of the programme”, although it was not made clear whether this might mean before or after its August 20 conclusion. The latest Memorandum of Understanding (MOU) requires completion of 88 prior actions to conclude a fourth review that will release the final tranche of soft loans. The coalition government has reportedly completed only twelve.

Impacts

• Tsipras will watch the polls to see if programme exit, debt relief and/or a deal with Skopje offer an opportunity for early elections.
• Calculations could be upset by confrontation with Turkey or the left-right Syriza-Anel coalition splitting over what to call Macedonia.
• Declining bond yields and favourable upcoming Greek bank stress tests might encourage the government to test the market before August.