Italy

Good morning from Italy, a stock market developing country. Although Italy is still the 8th largest econ in the world, all Italian shares combined are worth just $602bn. That's less than the mkt cap of Facebook ($690bn), and only about a third of Apple's mkt cap of $1.7tn.

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Greece: Debt relief, what to expect?

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Support for debt relief measures has increased in the past few months. Debt relief measures are not new; they were initially promised by the Eurogroup several years ago (but never fully materialised), while the Tsipras government had been asking for them since the beginning of its mandate, supported by the IMF. However, there has recently been a renewed impulse coming from various parts of the euro area, now that the programme is ending positively. Even Germany, which has historically been more focused on Greek reforms rather than debt relief measures, has recently been more inclined towards the idea. Nevertheless, expectations over the magnitude of debt relief measures vary widely. France, the EC and the IMF are pushing for stronger debt relief measures, as soon as possible. This scenario would reduce uncertainty on Greece’s repayment capacity and open up a virtuous circle; whereby the country could regain its IG status and be part of QE or ECB balance sheet re-investment...
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GREECE - IMF

The  head  of the  Euro Working Group  Vijlbrief expressed confidence that at the 21 June Eurogroup  there will be a comprehensive agreement for Greece, which most likely will not include financing from the IMF, although the Fund is expected to remain somehow involved in the programme (recall that Lagarde said recently that the IMF could be engaged in multiple forms and under multiple statuses). Vijlbrief, who expressed some concern over the nonparticipation of the IMF with funds, estimated that the Greek government will still not ask for a precautionary credit line. Vijlbrief also noted that the final tranche Greece can expect after the completion of the fourth review will be in the range of EUR 11-12 bn, while the size of the cash buffer for the post-bailout period has not been decided yet. Finally, the EWG head said that Greece would have to continue to fulfill three terms after the end of the current programme in August: reforms implementation, fiscal disci...
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Greece prior actions

A European official said that Greece would have to complete all  prior actions  by 14 June (until now only 10 of the total 88 prior actions have been implemented), so that the 21 June Eurogroup would be able to approve loan disbursements and make decisions on debt relief measures and post bailout monitoring mechanism. According to government’s plan, a multi-bill will be tabled in Parliament by 5 June and voted by 9 June, addressing the majority of actions, while for the remainder there will be ministerial decisions. The same official said that the reduction of the tax-free threshold in 2019 instead of scheduled 2020 was now “completely off the table”.
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