The Euro Crisis Is Entering A New, Highly Dangerous Phase. The Euro Has Blown Past The 2012 Low Today And Is Now Trading At The Weakest Level Since The 2010 Eurozone Debt Crisis. $1.2015.
Investmentwatchblog.com
January 4th, 2015
The Euro Crisis Is Entering A New, Highly Dangerous Phase.
EVER since the euro crisis erupted in late 2009 Greece has been at or near its heart. It was the first country to receive a bail-out, in May 2010. It was the subject of repeated debate over a possible departure from the single currency (the so-called Grexit) in 2011 and again in 2012.
It is the only country in the euro zone whose official debt has been restructured. On December 29th the Greek parliament failed to elect a president, forcing an early snap election to be called for January 25th. The euro crisis is entering a new, highly dangerous phase, and once again Greece finds itself at the centre.
Investors promptly swooned, with the Athens stockmarket falling by almost 5% in a single day, bank shares down by even more and Greek ten-year bond yields rising to a new 2014 high of 9.5% (over seven points above those for Italy). The reason for this collective outbreak of nerves is that the polls point to an election win for Syriza, a far-left populist party led by Alexis Tsipras.
Although Mr Tsipras says he wants to keep Greece in the euro, he also wants to dump most of the conditions attached to its bail-outs: he would end austerity, reverse cuts in the minimum wage and in public spending, scrap asset sales and seek to repudiate much of the country’s debt. Such a programme seems, to put it mildly, to sit uncomfortably with Greece’s continuing membership of the single currency.
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