Finance Desk

Published on 20/05/2026 – 2:31 GMT+2•Updated
2:36

Diplomats and MEPs reached an agreement late on Tuesday to implement the contentious EU-US agreement, which eliminates duties on most US industrial goods imported into Europe.

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The negotiations concluded two weeks after US President Donald Trump threatened to impose 25% tariffs on EU cars if Europeans did not implement the agreement — clinched by Trump and European Commission President Ursula von der Leyen in Turnberry, Scotland, last summer — by 4 July.

The so-called “Turnberry Agreement,” criticised by MEPs as unbalanced, raises US tariffs on EU goods to as much as 15%.

“The EU and the United States share the world’s largest and most integrated economic relationship. Maintaining a stable, predictable and balanced transatlantic partnership is in the interest of both sides,” Cyprus trade Minister Michael Damianos said, adding: “Today, the European Union delivers on its commitments.”

MEPs had kept the deal frozen for several weeks following Trump’s threats over Greenland earlier this year. They also suspended it after the US adopted new tariffs following a Supreme Court ruling that declared illegal the tariffs imposed by the White House since Trump’s return to power.

Demanding clarity from the Americans, EU lawmakers finally agreed to enter into negotiations with the EU Cyprus presidency — representing EU member states — after the Commission assured them that the US would honour its side of the agreement and cap its tariffs at 15%, as agreed.

Fragile EU-US relations

However, EU-US relations remain fragile and there is concern in Brussels that the US administration could still use tariffs to put political pressure on the EU if the bloc does not comply with the White House’s demands on other issues.

Trump’s threats over EU cars two weeks ago also targeted Germany, whose Chancellor Friedrich Merz has criticised the war in Iran launched by the Americans alongside Israel.

Trump has repeatedly called on European countries to deploy ships to help secure the Strait of Hormuz, a move Europeans have been reluctant to make.

Many disagreements also continue to strain EU–US relations over Ukraine — including the recent US extension of a sanctions waiver allowing purchases of Russian oil — and over NATO, which Trump has repeatedly threatened to leave.

On Tuesday night, MEPs tried to secure the deal by attaching conditions, risking US anger with additional provisions to which Washington had not agreed.

Under the Turnberry Agreement, the EU also committed to investing $600 billion across strategic sectors in the United States through 2028 and to purchasing $750 billion worth of US energy.

Optimism has been the name of the game since Operation Absolute Resolve took Maduro out. Such optimism doesn’t just come from Venezuelans, where polls showed support for the intervention, but also from the investment community, which has flocked into the country to assess all kinds of opportunities. Since then, oil revenues have increased, driven not just by output increments but also by favourable price tailwinds and sanctions relief, which meant the reintroduction of Venezuelan crude into the global market. Today, Venezuela is the second largest source of imported crude in the United States, something unthinkable five months ago.

The petro dollars haven’t come in by themselves. A mechanism was designed so American officials could control how and where those funds would be deployed in order to avoid the disappearance of half of all oil revenues, as was the case under the previous administration. Additionally, licenses were granted to the BCV, new laws were passed for the hydrocarbon and mining sectors, with new MoUs being signed with international energy companies. Even macroeconomic data sets have been released for the first time in over a decade. So much appears to have changed that even multilaterals (chiefly the IMF) reemerged as crucial partners for a potential debt restructuring and stabilization program. Optimism is granted and the illusion of recovery does not come without merit, given the changes the country has experienced in less than five months.

However, that mirage breaks against the harsh reality on the ground and macroeconomic indicators that tell a different story. A year-to-date inflation of 90%, a 70% depreciation of the official exchange rate, and a widening gap between multiple dollar rates that continues to punish businesses and individuals alike. Meanwhile, the Bolívar printing press is working overtime while BCV reserves remain flat, deepening macroeconomic uncertainty and destroying what little credibility the institution still retained.

The almighty bond market will need far more than an Instagram post to bite the bait. Sovereign creditors respond to numbers, rules, and enforceability. Venezuela remains deeply deficient on those fronts.

None of this reflects an economy that is stabilizing, despite the interim authorities having a golden opportunity to do so. Instead, it reflects a government trying to politically manage deterioration without implementing the reforms necessary to stop it. 

The current model is not designed to solve the crisis but to preserve political control while generating just enough liquidity, oil revenue, and international flexibility to postpone its inevitable collapse. The interim authorities continue to rely on the same mechanisms that created the disaster in the first place with an unsustainable monetary expansion, exchange-rate distortions, opaque fiscal management, and complete control over all institutions. So while oil revenues and external prospects may have improved, the underlying structure of the economy remains unchanged. 

Refusing to address the obvious

A country benefiting from stronger revenues should be rebuilding reserve buffers and restoring institutional confidence, and prioritizing the reconstruction of the essential services. Instead, every dollar is consumed by a State that remains just too large, too inefficient, and politically unwilling to reform. The central bank continues injecting Bolívares into an economy where there is effectively no confidence that the currency can preserve value over time, nor in the institutional capacity to sustain credible long-term policy.

This lack of confidence is central to understanding our persistent inflation problem. It is not solely driven by the irresponsible monetary expansion but by high money velocity resulting from the complete lack of credibility in our currency. As soon as businesses and individuals receive Bolívars, they rush to buy dollars, inventory, or any asset capable of preserving value, accelerating velocity and pushing inflation into a spiral. This is not speculation; it is rational economic behavior in response to the collapse of trust in the Bolívar. Without restoring that confidence, inflation will remain entrenched.

The foreign exchange market remains one of the clearest indicators of the country’s fragility. As the gap between the official and parallel rate distort prices throughout the economy. The widening gap between the official and parallel exchange rates distorts prices across the economy, leaving businesses struggling to establish stable cost structures or expansion plans. International investors also face enormous uncertainty regarding how those multiple rates affect their ability to move capital in and out of the country. Meanwhile, the BCV continues wasting precious dollar inflows trying to defend an artificial exchange rate that is fundamentally unsustainable. 

Without institutional legitimacy, no restructuring effort or investment cycle will prove durable or beneficial for the country.

Addressing these distortions may still be too politically costly for Rodriguez. Closing the gap would require a fiscal discipline alien to chavismo, while also dismantling one of the most important corruption mechanisms for rewarding insiders. 

The solution appears straightforward: transition toward a system in which dollar-auction pricing is transparent and the USD is allowed to float. Furthermore, the government should let the dollars circulate freely, letting businesses and individuals use the greenback for both transactions and contract setting. While alleviating the economic distortions, this will also contribute to slowing the velocity, and keeping inflation under control. Venezuela should pursue this approach while keeping the Bolívar alive so it can gradually recover credibility through discipline and a coherent fiscal and monetary framework. 

Yet the changes necessary to stabilize the economy are the same changes that would reduce the government’s discretionary control over the economy. As previously argued, setting an independent board in the likes of Petroleos de Venezuela or the Venezuelan Central Bank would threaten the political hegemony of the interim authorities across all institutions.

What sound debt restructuring implies

The next collision with reality, where fundamental flaws will be hard to conceal, lies in the newly announced debt restructuring process. Interim authorities are about to face the almighty bond market which will need far more than an Instagram post to bite the bait. Sovereign creditors respond to numbers, rules, and enforceability. And on those fronts, Venezuela remains deeply deficient.

Venezuela’s total debt is estimated at $200 billion or about 200% of GDP. Despite Venezuela receiving a license to be able to hire Centerview, one of the most prestigious boutique firms in the market, any meaningful and fair progress would be impossible without a coherent macroeconomic plan bound by institutional legitimacy and backed by multilateral oversight, particularly from the IMF.

For Venezuela to avoid setting itself up for failure through a restructuring process that could hinder its financial capacity to grow sustainably, the Fund becomes an indispensable partner. The IMF would need to conduct an assessment of the country’s current financial stance via an Article IV consultation that hasn’t been conducted since Chavez withdrew from the organization. This assessment would be a key piece in understanding Venezuela’s repayment capacity and debt sustainability, setting the base from where to negotiate towards an agreeable debt haircut, tenor, and coupon.

Nothing will come out of the great opportunity created by the January events if there is no fundamental change over the who and hows of economic management.

An IMF-backed restructuring would eventually demand fiscal transparency, monetary discipline, reserve accumulation, independent oversight, and credible institutional reforms. Additionally, creditors will call for legal certainty and enforceable agreements that provide confidence that rules will not arbitrarily change once capital enters the country, or years later when investors seek to exit . To provide such guarantees, Venezuela would need a legitimate political and legal framework capable of signing long-term agreements recognized both domestically and internationally 

Without institutional legitimacy, no restructuring effort or investment cycle will prove durable or beneficial for the country. Proceeding without these elements would leave the country exposed to holdout creditors and future arbitration battles. The cornerstone for avoiding that is a credible electoral timeline that renews and legitimizes the National Assembly and executive power.

Yet that process is also set to collide with the interim authorities’ apparent intention to manipulate political timing in their favor. The current leadership wants the benefits of the stability phase brought in by oil revenue, sanctions relief, and fresh capital without surrendering the mechanisms of control that produced the crisis in the first place.

That formula is destined to fail. The authorities are neither serious enough nor committed to making the necessary reforms. In the meantime, we can keep going over the distortion caused by the exchange rate, what new law is being proposed or the deceiving debt announcement from last week. But nothing will come out of the great opportunity created by the January events if there is no fundamental change over the who and hows of economic management.

Ahead of its May 28th analyst day, networking and cybersecurity firm F5 (FFIV) appears to be in the “early innings” of a hardware refresh cycle, aided by artificial intelligence, RBC Capital said.

“In addition to Systems strength, we think AI could

On the morning of 29 June 2015, Greeks woke up to find their banks closed.

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ATMs were limited to €60 a day. The Athens Stock Exchange did not open for trading.

Capital controls, the kind associated with crisis-era emerging markets rather than members of a developed-economy currency union, had arrived.

Five years earlier, in April and June 2010, Standard & Poor’s and Moody’s had cut Greek sovereign debt to junk, the first eurozone member to lose investment grade.

By February 2016 the Athex Composite had bottomed at 516.7 points, a fall of more than 90% from its October 2007 high of 5,334.5. The FTSE Athex Banks index, the country’s lenders, had collapsed by 99.6%.

Greek equities had ceased to function as an asset class.

They had become an obituary.

A decade on, the obituary needs rewriting. The Athens Composite Index has returned roughly 146% over the past five years on a total-return basis.

The Nasdaq 100, riding the artificial intelligence supercycle that has dominated global equity narratives, returned 116% over the same window. The S&P 500 delivered only about half of Greece’s gains, while European large-cap equities – tracked by the Euro STOXX 50 – achieved barely one-third.

This is the story of how Europe’s cautionary tale became one of the best turnaround trades of the modern era.

Greek stocks beat Nasdaq 100 over 5 years: Here is why

To understand the rally, start with the lenders. National Bank of Greece, Eurobank, Piraeus Bank and Alpha Bank carried the heaviest load through the crisis decade.

By late 2016 their combined non-performing loan ratio peaked near 47%, the worst in the European Union. For perspective, most other troubled European banking systems peaked at between 5% and 8%.

Greek lenders were not facing a credit problem. They were carrying a depression on their balance sheets.

The clean-up unfolded in two stages.

The Hellenic Asset Protection Scheme, known as Hercules, allowed the banks to securitise and offload roughly €57bn of bad loans through state-backed guarantees on the senior tranches.

The second leg was the slower work of organic profitability: stabilising deposits, restructuring cost bases, restoring net interest margins.

From bailout to bull market: The Athens turnaround

Combined net profits of the four largest Greek banks reached close to €5bn in 2025.

Shareholder payouts followed suit. Piraeus, Eurobank and Alpha Bank distributed around 55% of earnings, while National Bank of Greece pushed its total payout ratio to 86%, supported by aggressive buybacks.

Konstantinos Hatzidakis, then Greece’s minister of economy and finance, captured the moment in the IMF’s Finance & Development journal in June 2025.

“We have cleaned up bank balance sheets and curbed nonperforming loans. This major milestone has enabled lenders to regain their essential role in financing the real economy,” he wrote.

Hatzidakis pointed to rising deposits, stronger capital buffers and what he described as “a tangible vote of confidence” in the system: the successful sale of the Hellenic Financial Stability Fund’s bank stakes to long-term foreign investors.

“The Greek economy,” he added, “has consistently outperformed expectations, often by a significant margin.”

The quiet engine behind Greece’s economic miracle

The fiscal side of the recovery has received far less attention, but it has been equally important.

In a paper published by the IMF last week, economists Andrew Okello, Stoyan Markov and Chenghong Wang described the transformation of Greece’s tax administration as “one of the quiet engines behind Greece’s broader economic recovery”.

They divided the reform process into three overlapping stages.

The first, between 2010 and 2012, focused on stabilising government revenues under Troika supervision. One of the earliest breakthroughs came via VAT digitalisation: only 65% of registered taxpayers filed VAT returns on time in 2010, compared with 96% by 2014.

The second stage, between 2013 and 2017, centred on institution-building. Greece consolidated 288 local tax offices into 119 and established the Independent Authority for Public Revenue under a landmark 2016 law.

By 2017, the authority had become operational with its own budget and independently selected management board. During that period, the tax-to-GDP ratio rose from 25.8% to 27.6%.

The third stage, from 2018 onwards, introduced real-time electronic invoicing, point-of-sale connectivity and digital analytics systems. VAT revenues climbed from 7.1% of GDP in 2010 to around 9.5% in 2025.

Overall, Greece’s tax-to-GDP ratio rose from 20.5% in 2009 to roughly 28% in 2025.

The result has been a dramatic fiscal turnaround.

Greece recorded a primary surplus close to 5% of GDP in both 2024 and 2025, making it one of only a handful of EU countries running a fiscal surplus at all.

Meanwhile, sovereign spreads over German bunds — which once exceeded 30 percentage points during the peak of the crisis — have returned to levels last seen before the 2008 financial crisis.

According to the IMF’s March 2026 Article IV statement, Greece’s public debt-to-GDP ratio fell by around 10 percentage points in 2025 alone, reaching roughly 145%, down from a peak near 210% in 2020.

The IMF estimates the cumulative decline at roughly 65 percentage points from the pandemic-era peak.

Credit-rating agencies eventually followed. Scope Ratings restored Greece to investment grade in August 2023, followed by DBRS later that year, S&P in October 2023 and Fitch in December 2023.

Moody’s — the final holdout among the major agencies — upgraded Greece to Baa3 in March 2025 and reaffirmed the rating in April 2026.

For the first time in more than a decade, every major ratings agency now classifies Greek sovereign debt as investment grade.

Cheap when nobody wanted to look

The third pillar of the rally was valuation.

Greek equities entered the recovery period trading at discounts that became increasingly difficult to justify once balance sheets stabilised.

Even after the surge, Eurobank Equities estimates Greek banks are trading at roughly 9 times expected 2026 earnings and 1.4 times tangible book value — still more than 20% below European peers.

UBS estimates the sector’s average 2027 price-to-earnings ratio – a key measure of how cheaply or expensively stocks trade relative to expected profits – at 8.4x, compared with 9.5x for European banks overall. For comparison, US equities currently trade at more than 20 times forward 12-month earnings.

Over the past five years, shares of National Bank of Greece and Piraeus Bank have each surged by roughly 500%. Yet despite the extraordinary rally, both lenders still trade at single-digit earnings multiples.

The most structural financial change arrived last.

On 24 November 2025, Euronext completed its acquisition of the Athens Stock Exchange after roughly 74% shareholder acceptance of the all-share offer.

Greek stocks now sits inside Europe’s largest equity listing venue, alongside more than 1,800 listed companies.

The mechanical consequence is a broader pool of natural buyers. International index funds tracking pan-European benchmarks now hold Greek names automatically.

MSCI – the world’s largest index provider – is reviewing Greece for a potential upgrade to Developed Market status, effective September 2026 if approved, which would shift the country out of the small bucket of emerging-market money still chasing it and into the much larger pool of developed-market index allocations.

JP Morgan has forecast a 16% return for the MSCI Greece index in 2026.

Inside the sector, the maturing is showing up in mergers and acquisitions. In May 2026 Eurobank agreed to acquire 80% of Eurolife FFH Life Insurance for around €813m, a deal expected to lift group fee income by roughly 12%.

National Bank of Greece signed a Memorandum of Understanding with Allianz on a 30% stake in Allianz Hellas, with the partnership projected to add 4% to earnings per share.

The Optima offer for Euroxx underscores the same dynamic.

Greek financials are no longer just rebuilding. They are consolidating.

A decade later, Greece looks different

None of this means Greece is insulated from external shocks.

The IMF warned in March 2026 that the outlook remains “clouded by the conflict in the Middle East”. Tourism still accounts for roughly 21% of Greek GDP, leaving the economy vulnerable to geopolitical disruptions.

The Recovery and Resilience Facility — which has underpinned much of the country’s recent investment boom — is also due to wind down in August 2026.

Inflation remains elevated, running at 3.1% year-on-year in February 2026.

Hatzidakis himself acknowledged the remaining weaknesses in his June 2025 essay: investment still trails the EU average, productivity remains below European peers, and female labour-force participation is still among the lowest in the bloc.

Piraeus chief executive Christos Megalou told analysts during the bank’s first-quarter earnings call that a prolonged period of elevated energy prices could slow Greek GDP growth to between 1.5% and 1.6%, albeit still above the EU average.

Still, Greece stands as one of the clearest examples in modern financial history of how a country pushed to the edge of sovereign default managed to engineer a broad-based recovery through fiscal repair, banking-sector restructuring and institutional reform.

Ten years ago, Greek debt was rated junk, banks were shut and the stock market had lost more than 90% of its value.

Today, the sovereign carries investment-grade ratings across the board and the Athens Composite Index has achieved something few thought possible five years ago: it has outperformed the Nasdaq 100.

Whether the next five years will deliver the same kind of returns remains uncertain.

But for the first time in a generation, Greece is no longer a symbol of financial collapse. It is increasingly becoming a case study in recovery.