Greece Plan B if No Bailout Tomorrow

Greece Plan B if No Bailout Tomorrow.

Over the weekend the Greek Parliament voted yes to austerity cuts of over £11bn per year as a precursor for the meeting of Euro finance ministers on Tuesday.  

At this meeting a decision will be made for a further bailout for Greece.  Greece expects to be bankrupted by the end of the week if a bailout is not agreed.

Greece has a plan B, where they are going to the markets today in a bid to raise funds on the open bond market to raise around €3bn just to keep the country afloat, this will enable them to repay the €4bn debt that is due this week.

Our view
We think the plan B will fail, Greece will have to offer very high yields of 20% plus, that it just cannot afford to attract even the most adventurous investor.  That said, we cannot see the Euro ministers not agreeing to the bailout.  We expect a yes vote in Europe tomorrow, thus staving off collapse for another few months.  These issues are compounded in that Cyprus is also returning to the table to negotiate a further bailout with the IMF and Eurozone as its struggles to repay its debts.