The euro is rebounding early Wednesday against the dollar as traders cautiously await the results of tomorrow’s meeting between Greek Prime Minister Alexis Tsipras and Greece’s creditors over the latest last minute proposal from Athens after 5 months of negotiations have failed to produce a mutual agreement that allows Greece to receive its final disbursement of its €240 billion bailout package.
Greek Prime Minister Tsipras will meet on Wednesday in Brussels with IMF Managing Director Christine Lagarde, European Commission President Jean Claude Junker, and ECB President Mario Draghi to smooth over any differences that could prevent an agreement from being reached.
Later in the evening, Euro group finance ministers will meet and get a possible agreement prepared for a Thursday EU Summit meeting attended by EU leaders.
According to Greek newspaper Kathimerini, which cited a European official, there are still weaknesses in Greece’s proposals and time is running out as Greece is faced with a €1.6 billion payment to the IMF by June 30th.
The unnamed European official said that Greece’s proposals violate many of the creditors’ “red lines” on value added tax rates and pensions because the Greek proposal relies too heavy on revenue-raising measures instead of spending cuts, which could move the indebted country further into recession and widen the fiscal gap, requiring further measures.