Report on Greek Debt May Wait Until After U.S. Elections

A report from the so-called ‘troika’ — the European Commission, the European Central Bank, and the International Monetary Fund — on Greece’s ability to repay its debt may be delayed until after the U.S. elections on November 6th. The report had been expected in time for the October 8th meeting of eurozone finance ministers, but Reuters reports that its sources say the Obama administration “has made clear” that it would prefer no surprise economic news before U.S. election day.

The troika report will focus on Greece’s ability to reduce its debt to less than 120% of GDP by 2020. That is one of the requirements levied on the country by the IMF. If the troika report indicates that the country has little or no chance of reaching that goal, bond and equity markets on the continent will react badly, throwing the global economy into yet another tailspin.

The political implications may be equally as important as the economic ones. One source cited by Reuters said:

As far as European leaders are concerned, they don’t want Romney, so they’re probably willing to do anything to help Obama’s chances.

Being popular among Europeans has never been a strong recommendation for a U.S. presidential candidate.

Paul Ausick