Capital Econ: The Greek Crisis Starts To Restrain Euro Recovery

The Capital Economics, US Economics Weekly Bulletin focused on the spillover effects of the Greek crisis this week, (27th April 2015).

Greek crisis

The Greek crisis continues to drag on with Friday's meeting of euro-zone finance ministers not yielding any major breakthroughs in the negotiations over the remaining tranche of Greece’s second bailout.

Nonetheless, there were some positive developments last week:

Firstly, officials appeared to conclude that setting Greece successive deadlines was counter-productive. These deadlines have been adding pressure to the situation, and there is now scope for the Greek government to buy more time.

Secondly, Greece is no longer at risk of going bankrupt this month. The government's raid on state entities has, for the time being, eased worries of...