Greece and its creditors to start third bailout negotiations

Greece and its creditors eventually agreed to start negotiations on a third bailout. While a "Grexit" is no longer expected in the near term, the current situation lacks a stable footing and so risks remain elevated over the medium term.

The key issues to watch will be developments in programme discussions (particularly OSI), domestic politics, and the banking system, against a significantly deteriorated macroeconomic backdrop.

Plan is to conclude them in time for Greece to meet ECB repayment on 20 Aug with ESM money (€6bn remains at EFSM, otherwise). IMF is not supposed to make any disbursements until first review and debt relief is granted by Europe. 

"In the meantime, EC, member states and IMF need to agree on the technicalities of the OSI. It will also depend on macroeconomic assumptions", says Barclays.