By TraderVox.com
Tradervox.com (Dublin) – The Swiss franc appreciated to its highest level in two months versus the euro as the euro zone finance ministers failed to deliver on how they will fill a fresh hole in Greece balance sheet. The finance ministers added two more years for Greece to reduce its budget deficit to 2 percent.
After a meeting in Brussels, finance ministers decided to keep money flowing to Greece for an additional two years, as lenders led by Germany agreed to add two more years to Greece’s deficit reduction timeline. This is aimed at protecting Greece from exiting the euro zone. According to Wolfgang Schaeuble, Greece has made far-reaching decisions that point in the right direction; hence additional time would help the country secure its recovery.
In a statement after the meeting, Wolfgang indicated that aid program for Greece can be adjusted to fill a financing gap of up to 32.6 billion euros without any cost to creditors. The International Monetary Fund Managing Director Christine Lagarde did not comment on whether the institution would maintain its lending after the ministers increased Greece’s time schedule.
According to Lagard, the debt sustainability issue in Greece should be measured in 2020. She differed with other finance ministers, but said that what matters is Greek debt sustainability. If IMF fails to add its funding for Greece financing, then euro zone governments would have to dig deeper into their coffers to maintain Greece in the region.
Jean-Claude Junker, who chairs the Finance Ministers meetings, predicted that they would have definite solution next week on November 20. According to Carsten Brzeski, the finance ministers’ decision is typical fudge that has been happening in Europe.
The Swiss franc opened the day higher against the euro, rising by 0.1 percent to 1.2046 per euro. This is the highest it has been since September 12.
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