The confusion about EU or IMF or both loans for Greece is now causing the markets to fret. Greek German 10 year bond spreads are now out to an eye watering 4.54%! The Greeks cannot afford to borrow over 10 years at anything like that rate so they are funding themselves at the very shortest end of the market, €1.5 bn in 3 month and 6 month money today and waiting like Mr Micawber, another bankrupt, for something to turn up. Mid May is crunch time with the Greeks needing to refinance €8.5bn. What is clear is that the market has had enough Euro babble. It wants a hard coherent plan of action. Sounds more like the IMF than the EU.
The Greek trade unions have called a fresh strike for Thursday and have made it clear they will not accept EU demands for pension cuts. No one wants Greek debt and the Chinese, who hold over €1000 bn of Eurozone debt, are making ominous noises about Greece being the tip of the iceberg.
There is a rumour that the Greeks are trying to extract better terms by their delaying tactics. The Greek threat is they may opt for a euphemistically entitled debt restructuring with creditors accepting a 50% 'haircut'. That's a default. In plain English we can't pay you the money due to you.
The political stakes continue to rise with the temperature in Greece. Greek polls are showing rising unpopularity for the IMF seen as the high priest of Thatcherism.
One thing is clear. Matters will have to come to a head soon.
An update on my investment advice for our wealthy UKIP MEPs, today's RPI jumped to 4.4%, so index linked National Savings Certificates will pay you 5.4% net. That's a good return for the 40%+ tax payer.