If the media reports are correct, the Greek Prime Minister Alexis Tsipras just agreed to the same deal that Greece’s euro-area creditors offered Greece before Tsipras abruptly demanded a referendum. The Greek people overwhelmingly voted to reject the bailout offer from creditors, but now Mr. Tsipras is apparently agreeing to what amounts to the same deal. So with that, the markets are telling us the Greek crisis is over—for now at least.
For now, you say? Yup, for now could be until Sunday as euro-area parliaments still have to agree to the deal. But even if they do, we unfortunately haven’t seen the last of the Greek crisis. Mr. Tsipras’s referendum stunt which forced capital controls and rationing of cash likely sent the Greek economy further into the tank. It will now be much more difficult for Greece to achieve the structural and fiscal adjustments demanded by its creditors. The good news is markets may finally be able to move past the Greek circus. The bad news: the quarterly earnings circus will be in town next week. Enjoy!
Jeremy Jones, CFA
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