The last hour has seen a ton of breaking headlines out of Europe, as the Greek crisis comes front and centre yet again.
The gist is that we won’t be seeing moves on Greece at the European finance ministers meeting on Monday, May 16. But we are likely to see the Portuguese bailout deal concluded, and Ireland get a cut on its bailout loan interest rate.
Earlier, German Chancellor Angela Merkel refused to commit to further aid for Greece until she sees the IMF-EU report on the country’s progress, which won’t be available until June. Olli Rehn, European finance chief, has also refused to be nailed down on any Greek numbers, saying he’ll also be waiting for the report. French finance minister Christiane Lagarde was more dovish, saying eurozone leaders will continue to rescue Greece.
These comments come after Italian ECB member Lorenzo Bini Smaghi told the publication La Stampa that a Greek debt restructuring would lead to a “true economic meltdown.” Ewald Nowotny, also of the ECB, said a restructuring would only make the crisis worse.
Rehn also went into specifics on the Portuguese bailout, the details of which are likely to be confirmed at May 16 finance ministers meeting. He said the country’s interest rate would likely fall between 5.5% and 6.0% on its bailout loans. Rehn also said that Ireland could expect a cut in its bailout loan interest rate “shortly.”
Germany is also undergoing a bit of cabinet reshuffle today, with Merkel’s economy minister, Rainer Brüderle, resigning to takeover as parliamentary chief of his FDP party. Brüderle will be replaced by another FDP member, Philipp Rösler, after recent poor election results for the party.
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The euro has been moving around on all these comments. Markets are still very uncertain on what the result of the Greece situation will be.