7/16/2015
By Charles Payne, CEO & Principal Analyst

It has been a long and excruciating ordeal, but Greece has finally been granted a third bailout loan to save it from bankruptcy. Over the next three years, the country could receive $95 billion provided it adheres to certain conditions outlined in the deal such as reforming its country with new policies viewed by the Greek population as unfavorable.

In the end, it wasn’t even close as the Greek parliament voted to accept the offer it had flatly rejected, only a couple of week ago. The only difference this time is that it is even more draconian. The deal seems so lopsided; in fact, one member of the Troika voiced opposition.

The Vote

229  Yes
64    No

In an address to Parliment, Finance Minister Euclid Tsakalotos stated the deal Greece reached with its creditors on Monday was its only choice possible. "I must tell you, that Monday morning at 9:30, it was the most difficult day of my life. It was a decision that will weigh on me for the rest of my life," Tsakalotos said.  "I don't know if we did the right thing. But I know we did something with the sense that we had no choice. Nothing was certain and nothing is."

The Greek parliament vote means this issue is put to bed legislatively, but the riots began last night.  They spread like wildfire among the dissatisfied and unemployed European youth. Unemployment rates for these young adults mirrors those who existed when the Arab Spring erupted.

Negotiations on the new bailout could take several weeks and European finance ministers are looking for ways to get money to Greece in the interim, including giving 7 billion euros in loans from a fund overseen by all 28 EU nations.

The International Monetary Fund (IMF) is projecting debt-to-gross domestic product (GDP) climbing to 200% from a current 177%.  Of course, the IMF was the first party stiffed and they have a lot at stake. So, I am not sure if they are talking in order to repair their reputation for usury and unreasonable demands in past bailouts.

Charles Payne
Wall Street Strategies

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