A critical week for Greece and Europe

Monday marks the most critical date yet for Greece in the ongoing talks; the Eurogroup starts at 12h30 CET and the Euro Summit at 19h00 CET. With just 9 days left before the current bailout expires and €1.54bn falls due to the IMF, the question remains whether the new proposal hammered out in Athens over the weekend will suffice to secure agreement on Monday. 

The ECB, however, is critical when it comes to hard deadlines. Friday, the Bank of Greece was reportedly only granted half of the ELA increase it requested and the ECB is set to review the situation again on Monday. Without sufficient ELA, Greece would be forced to adopt capital controls. No ELA, would de facto force Grexit. 

Last week, ECB President Draghi noted that "liquidity will continue to be extended as long as Greek banks are solvent and have sufficient collateral". If the Greek government fails to strike a deal and defaults on its obligations, that may not be for very long. 

The European Council on 25-26 June is also key with ECB President Draghi due to present a proposal for a "quantum leap" on further European integration, and notably on fiscal union. Prime Minster Cameron will also aim to secure some indications on the concessions he hopes to win ahead of the promised referendum on UK European Union membership due by end 2017.