Marketing Communication
Group Economics
Euro Rates Weekly
Macro & Financial Markets Research Kim Liu +31 20 343 4669 kim.liu@nl.abnamro.com
Greek default fallout?
DISCLAIMER: This report has not been prepared in accordance with the legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead. This report is marketing communication and not investment research and is intended for professional and eligible clients only.
26 June 2015 This is the last Euro Rates Weekly before our summer break. Regular service of the Weekly will restart 31 July.
The whole world is watching how the Greek stalemate will evolve In the meantime, spreads of peripheral bonds and Bunds have come back from their highs Volatility in peripheral bonds is almost comparable to the levels of earlier this year The data therefore suggests that investors are less nervous of a Grexit
And the supply monitor: Supply will be heavy out of core and periphery, but will be counterbalanced by coupon and redemptions payments Greece stalemate continues into the weekend In what is becoming a reoccurring story, discussions between
Official sector exposure to Greece (EUR bn) ECB*
Greece and the institutions are still ongoing. The gaps
EFSF/bilateral
IMF
Total
% GDP
loans
between the two sides have reportedly narrowed. On all the areas mentioned above, the differences were much bigger a
AT
4.3
5.8
0.3
10.4
3.3
few days ago and now actually look like they can be bridged.
BE
5.4
7.2
0.6
13.3
3.3
Today, news came out that creditors have given a proposal to
FI
2.7
3.7
0.2
6.6
3.3
try to reach an agreement. This increases the likelihood of a
FR
31.0
42.0
1.5
74.6
3.5
deal but tensions are still elevated. Recent events have
DE
39.4
55.3
2.0
96.7
3.3
strengthened our base line view that a deal will be reached
IT
26.9
36.8
1.1
64.9
4.0
eventually. All hopes are now centered on another Eurogroup
IE
2.5
0.9
0.2
3.6
2.0
meeting which is scheduled tomorrow.
NL
8.8
11.8
0.7
21.3
3.2
PT
3.8
1.4
0.1
5.3
3.1
ES
19.4
25.0
0.6
44.9
4.2
A Greek exit would have less financial and economic
Rest**
3.8
4.8
0.2
8.8
4.6
consequences than in 2012, as exposure of eurozone
Total
148.1
194.7
7.6
350.4
3.4
Which country would be hurt by a Grexit?
countries is modest. Official sector exposure amount to around EUR 350bn (see table below). This equates to 3.4% of eurozone GDP. If Greece left the eurozone by having
Sources: ECB, national central banks, EFSF, IMF, Ministries of Finance, ABN AMRO Group Economics (due to rounding figures may not add up)
defaulted on its debt, the main losses would fall on EU
* Contains bonds purchases under the Securities Market Programme as well as net MRO and LTRO borrowing
countries via exposures via the EFSF, bilateral loans and the
** Includes Cyprus, Estonia, Luxembourg, Malta, Slovakia and Slovenia
ECB (via the capital key if it did need to be recapitalized). In terms of exposure as % to GDP, Spain and Italy would be hurt most. In absolute terms, Germany, France, Italy and Spain would rank amongst the countries with the highest exposure to Greece.
Insights.abnamro.nl/en
Bloomberg: ABNM