- New Development Bank (with India, Russia, Brazil & South Africa), $50bn in capital + $100bn of pooled foreign exchange reserves - copycat of World Bank.
- Asian Infrastructure Investment Bank ($100bn in capital) - copycat of World Bank & Asian Development Bank (ADB).
- Silk Road infrastructure fund ($40bn in capital) to boost connectivity across Asia.
- Exchange European rescue loans for new bonds linked to future GDP growth.
- Convert bonds owned by the ECB to perpetual bonds (bonds without maturity).
- Nothing agreed yet, and resistance from EU.
- Exchange existing European rescue loans for new bonds linked to future GDP growth - Bosnia, Bulgaria, Costa Rica & Mexico have issued similar instruments in the past.
- Downside protection for Greece - pay more to creditors when economy does well, and less when economy slows, so good risk-sharing solution.
- But problem insofar as imply more flexibility from creditors (but better than outright default), and also might result in Greece fudging GDP numbers.
- Big structural currency shifts are never a good thing.
- Political ramifications - might make Trans Pacific Trade Partnership harder to sign off this year.
- Bad for exporters + bad for companies with overseas operations (e.g. 47% of revenues of S&P500 companies generated abroad, so negative impact on their earnings).
- US growth solid compared to weakness in rest of world.
- US bond yields higher than rest of developed world.
- Latter will become more pronounced as Fed raises rates while rest of world cuts.
- New Finance Minister defiant yet new PM (Tsipras) seems more pragmatic, saying no unilateral action will be taken.
- Government initially stated it will no longer co-operate with the international lenders (i.e. IMF + ECB + EC) that oversaw bailout program, and will ignore the bailout terms (by reversing reforms).
- Tsipras walking tightrope between electoral promises (to renegotiate Greece's debt) and promises to creditors.
- In speeches is anti austerity + praises Draghinomics (i.e. stimulus via increased government spending).
- Remains popular and has positioned himself as a rebel working within the system.
- Walking tightrope of nudging his left-wing Democratic Party towards the right, while simultaneously urging the EU to give Italy more budget flexibility.