After several months of negotiations, Greece and its creditors have finally come to an agreement for a new bailout package .The eurozone agrees in principle to start negotiations on a loan package for Greece worth €82bn-86bn. The loan will come mainly from the European Stability Mechanism (ESM) - the eurozone bailout fund.
The International Monetary Fund will also be asked to make a contribution from March 2016. Greece will get short-term bridge financing to avoid bankruptcy separate from the ESM. The amount is estimated to be €7bn by next Monday and another €5bn by mid-August. Out of the total ESM loan about €10bn will be used immediately to recapitalise Greek banks, enabling banks to potentially lift ATM and pension restrictions.
Four pieces of legislation must be passed by the end of Wednesday including pension and VAT reforms. But Defence Minister Panos Kammenos, a junior coalition partner, has already said he will not support the measures. If the deal fails, Greece's banks face collapse and the country could then be forced to leave the euro. The bailout is conditional on Greece passing all the agreed reforms - including raising tax revenue and liberalising the labour market .
A survey yesterday revealed interest rates on personal loans have dropped to the lowest levels on record in the latest evidence that the cost of borrowing is continuing to fall for consumers.
While there has been no change to the Bank’s 0.5% interest rate since March 2009, the Bank of England pointed to increased competition among lenders for the recent fall in borrowing rates and rise in consumer confidence. Lending rates are being lowered at a time when economists are urging caution to borrowers amid expectations that the Bank cannot maintain the current low rates indefinetley.
09:30 – GBP : Consumer Price Index (YoY)
expected to decrease to 0% from 0.1% previous.
13:30 – USD :Retail Sales expected to decrease to 0.3% from 1.2%