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Friday, February 6, 2015

Here's what happens next in Greece's debt drama

Greek prime minister Alexis Tsipras and finance minister Yanis Varoufakis are back in Athens after a European tour in an attempt to sell a debt restructuring deal. But the drama is not over.  On Thursday, Varoufakis visited Germany and invoked memories of the rise of Nazism, saying that his country was going through a period like the early-1930s in Germany. On the minister's return, Greek leader Tsipras said the country "won't take orders anymore." He wants the bailout and austerity agreements made with the country's major international creditors scrapped, but hasn't won any major concessions yet. So what happens next? Well, Greece has potentially just weeks of cash left. The bailout, which the government depends on to fund itself, runs out at the end of February. Varoufakis and the government are asking for a bridging loan from Europe while debt is negotiated: they want  something just to tide them over for the next few months, with no strings attached.  The next Eurogroup meeting of the euro finance ministers was pushed ahead to Feb. 11 with Greece back at the top of the eurozone's list of problems, two-and-a-half years after the end of the euro crisis. Oxford Economics' Gabriel Sterne expects that Athens will get a bridging loan, but that the "ultimate crunch point" will come in July and August when Greece has other major debt repayments to make. It's not clear what happens if there simply isn't support for a temporary loan this month, and other European countries decide to bring that crunch point ahead. BNP Paribas has a useful timeline showing how pressure will build on Greece after the bailout funding ends. They'll have a lot of large bond payments to make:  Join the conversation about this story » NOW WATCH: A 13-Year-Old Made A Revolutionary Invention Out Of Legos And Now Intel Is Investing In His Company


READ THE ORIGINAL POST AT uk.businessinsider.com