As was widely expected, Greece has announced another package of savings, roughly split between tax hikes and spending cuts, that projects to save another 4.8 bln euros, which is roughly 2% of GDP. The measures are harsh, but it is still too soon to expect Europe to provide anything but verbal support and solidarity. Nor can there be any money forthcoming from the Greek PM's visit with the German Chancellor on Friday.
The key now is implementation. As we have argued, that is why March 16th is important. It is the first status report of the implementation. In January, due to a one-off corporate tax, Greece appeared ahead of plan. Many of the initial efforts by Greece appeared aimed at showing immediate results.
This is the Catch-22. If Greece is indeed implementing its programs and the social unrest and deeper economic contraction and higher interest rates have not offset it, Greece may not require financial assistance...yet. On the other hand, many European officials appear to be more sympathetic to material support if Greece was committed (now through implementation) to its austerity plan.
The euro is extending the recovery begun yesterday off the new lows for the move (~$1.3436), and at $1.3670 earlier today set the high for the week. Resistance is seen in front of last week's high just shy of $1.3700. The euro is trading above its 20-day moving average (~$1.3633) for the first time since January 15.