Greek lawmakers approved pension cuts and tax hikes late last week, sought by the country’s lenders to unlock financial aid, as angry demonstrators protested outside parliament over new austerity measures.
The government hopes that legislating the measures, ahead of the Eurogroup meetings, will convince its lenders to release a 7.5 billion euro bailout tranche and grant it further debt relief. Prime Minister Alexis Tsipras said “we deserve and we expect from Monday’s Eurogroup a decision regulating debt relief which will correspond to the sacrifices of the Greek people.”
Lenders have agreed in principle to debt restructuring, but details have not yet been confirmed. The IMF has been reluctant to join Greece’s current bailout, insisting that it wants assurances that its debt will be sustainable.
Euro zone finance ministers will discuss these issues today to assess Greece’s bailout progress following the parliamentary approval of the reforms.
The past week was marked by political scandals surrounding President Trump which ended up prompting a general Dollar sell-off. The dollar hit a fresh six-month low against other major currencies on Friday, following reports that U.S. President Donald Trump asked former FBI Director James Comey to end the agency’s investigation into ties between former White House national security adviser Michael Flynn and Russia.
With a lack of US data releases early this week, focus turns to Comey’s testimony, as well as the release of the Fed meeting minutes due on Wednesday.
Late on Friday St Louis Federal Reserve President James Bullard said that the expected plans for rate increases may be too fast for an economy that has shown recent signs of weakness. The Fed is still widely expected to raise interest rates at its June meeting, however the recent drop in inflation and inflation expectations, together with political risk have raised concerns. At the start of the year, expectations were that tax, regulatory and other changes would boost growth. This caused improved business confidence, however these changes are looking less likely with the Trump administration facing continued controversy.