European finance ministers agreed on a €130 billion bailout deal for Greece, with the aim of bringing its debt-to-GDP ratio down to 120 per cent of GDP by 2020.But the deal still needs to be signed by Euro area parliaments, and the news didn’t help European stock markets.
Now, Dennis Gartman said in his latest investor newsletter (via CNBC) that officials have only managed to delay a Greek default by a few weeks or months at most. He expects Greece to default after the elections in April (via CNBC):
“A new government is going to come to power following elections that shall take place sometime this spring, and if anyone anywhere believes that the next Greek government shall do anything other than abrogate all the agreements made with the ‘troika,’ then we have a bridge we’d like to sell them at a very high price.”
Gartman said the 120 per cent debt-to-GDP ratio target for 2020 is ‘comical’. He added that Greece will likely face a depression soon as Athens tries to grow its economy while tightening its fiscal policy at the same time. Gartman said Greeks will start to grow increasingly desperate and resent European nations forcing austerity on the country, especially Germany. He said, “”It has come to this: Greece and Germany are effectively at war.”