Greek election adds to bailout implementation risks

Prime Minister Tsipras’ decision to call an election threw the Greek situation back into disarray only hours after he secured Greece’s first bailout payment last week. Tsipras should win, perhaps with a stronger mandate to pass reforms. But as no major reform is now likely before the September election, Greece seems set to fail the October review of its bailout, limiting any chance of early debt relief.

The fall in France’s PMI in August dashed hopes that the country’s recovery was about to regain momentum. This will make it even less likely that France will meet its budget deficit targets over the next few years.