What happened to Grexit?
Talks over Greece’s third bailout took place between the so-called ‘troika’ of lenders: the European Central Bank (ECB), International Monetary Fund (IMF), and a fund sponsored by several European governments (most notably Germany, France and Italy).
Greece needed extra funds to meet €6.3 billion in bond repayments. Default again, and the writing would have been on the wall for Grexit.
With the IMF sceptical of a deal that didn’t lessen Greece’s debt load, and Germany unwilling to ratify any solution that didn’t include IMF involvement, it looked like talks might go down to the wire. But in the end, a compromise was agreed well before the deadline.
Once again, though, the outcome fell short of what most parties wanted. Analysts were quick to point out that the deal didn’t actually include any real provisions for reducing Greece’s debt load – with debt relief only being considered in 2018, and taking the form of loan repayment extensions. Without that debt relief, there’s no chance of Greece joining the ECB’s quantitative easing (QE) programme and attracting outside investment once more.