Whenever some hapless country has a debt crisis these days, rescue negotiations with the International Monetary Fund (IMF) and other lenders are often enlivened by rumours and speculation that Russia and/or China will ride in to save the day.
The latest subject of such conjecture is Greece, currently conducting combative talks with its eurozone government creditors about trading off fiscal space and debt relief for implementing structural changes. Such speculation, though, has so far almost entirely been disproved, and so it will very likely be in this case.
Like Iceland, Pakistan and Cyprus before it, Greece simply cannot offer enough to either China or Russia to be worth the money and geopolitical turmoil involved. EM governments are still a long distance from supplanting the crisis-fighting role of the advanced economies and the multilateral institutions. Read more
Like a band reforming to trot out the old hits in the hope of funding their impending retirement, the prospect of Grexit somehow doesn’t seem as exciting the second time round.
Back in 2011 and 2012, when the threat of Greece leaving the euro was taken very seriously by investors, the knock-on effects were considerable. The future of the eurozone was held to be at stake; the bond spreads of the other troubled peripheral countries, notably Spain, Portugal and Italy, blew out to alarming proportions. Read more
Greece is being relegated from a developed to an emerging stock market. Lex’s Oliver Ralph and Joseph Cotterill discuss whether Greek stocks are worthy of being treated as emerging with the country’s poor expected growth outlook.
When index provider MSCI reclassified Greece as an EM back in June, there were a mixture of jokes doing the round about “submerging” rather than “emerging”.
Fair enough. On Thursday, S&P Dow Jones Indices agreed, moving Greece down to EM as well. But what’s the actual implication? What stocks will be included? Read more
It’s easy to see why Russell Indices, the US index and fund management company, is relegating Greece from its developed economies’ league. About time too. But why is Russell moving Greece into its emerging markets’ list. Emerging? Submerging, more like.
Emerging markets are the fast-growing economies of the world. So much so that many economists have stopped talking about EMs and refer instead to fast-growth economies. Jim O’Neill, the Goldman Sachs executive who invented the Brics, calls these countries “The Growth Map”. Read more
By David Edgerly
Given the endless sovereign debt crisis in Greece, the collapse of the economy, the chaos and corruption of the country’s politics it is perhaps understandable that reasonable investors have lost interest in the Athens Stock Exchange. Index provider MSCI is mulling whether to reclassify Greece as an emerging market.
There’s quite a frontier feel to Greece at the moment. Phone calls to inquire about investing in Greece, in any form, are often met with either stunned silence or gales of laughter. Read more
After all the dust has settled and the surprise over MSCI’s decision to put Greece on review for a possible demotion to emerging markets status has worn off, beyondbrics can’t help but wonder: what took MSCI so long? Read more