July 20 İs Deadline Date For Greece And Euro: Analysts

The next deadline for Greece is on July 20, and it's another one the country is likely to miss, analysts said on Monday.



On that date, Greece must make a €3.5 billion ($3.9 billion) bond redemption payment to the European Central Bank (ECB), but analysts don't think the Greek government can make the payment.



"Failure to pay will effectively make default formal," warned Konstantinos Venetis, an economist with Lombard Street Research, in a note on Monday.



"With the lion's share of bank collateral rendered ineligible for ELA [Emergency Liquidity Assistance or emergency loans], the financial system would collapse, necessitating large-scale recapitalizations/bail-ins, paving the way for IOU [I Owe You] issuance and forcing the gates of Grexit [Greece Exit] wide open," Venetis explained. Should Greek banks run out of euros, they will be forced to operate on an IOU basis in an alternate currency (until more of the alternate becomes available).



Analysts at Barclays also forecast July 20 as the end of hope for a Greece in the eurozone.



"Failure to pay the ECB would be disastrous in more than one way. In addition to the panic an actual default would cause by itself, it would make it impossible for the ECB to carry on lending to Greek banks against Greek government collateral through an emergency credit line. The banks would almost certainly collapse," the analysts said in a note on Monday.



Greece has asked for a delay on the payment from the ECB, but such delays are rarely granted, the analysts said.



That means the Greek government has only 13 days left to arrange some sort of funding agreement with its creditors. - Ankara