Greece Update - Again no decision, but options are clear

From Deutsche Bank
Today's second Eurogroup meeting on Greece was cut short, again concluding in deadlock. The atmosphere remains tense, but through all the multiple and conflicting headlines, the subsequent Eurogroup press conference provides us with a clear framework on how the Greek crisis will progress over the next few days and weeks.
First, Eurogroup chair Dijsselbloem has formally confirmed that Europe's preferred path forward is a Greek request to legally extend the current program that expires on February 28th. Such a request needs to materialize by the end of the week, to give time to six national parliaments (inclusive of the Netherlands, Germany and Finland) to pass this extension through into legislation. Failing this deadline Dijsselbloem confirmed that the only option that would then be left to Greece would be a request for a fresh 3rd ESM program. All in all, the starting point therefore remains the same as the one we had outlined a few weeks ago: semantics aside, Greece can choose to either extend the program or apply for a new one.
Second, it is now also clear that either program extension, or a potential new program will require specific conditions. Eurogroup head Dijsselbloem specified three conditions, which are also apparent in the leaked Eurogroup draft statement that was rejected by the Greek side: a commitment to fulfill financial obligations (ie. repay debt), a commitment to not take unilateral actions (ie. to not reverse prior program policy) while negotiations are..

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