Greece And Europe Back on Track?
Greece and its ongoing repayment issues continue to take the headlines. Whilst an EU summit continues, Greek PM Tsipras met up with major EMU players to try to push forward the reform and repayment plans which appear to have been treading in treacle over the past couple of weeks. Relations between the various parties appeared to have deteriorated recently but there was a hint of optimism last night as Tsipras has announced that all is back on track.
Angela Merkel, whilst hardly jumping up and down with excitement, expressed hope that reforms will come, the Greek Government will take full responsibility for reforms over the next few days and everyone needs to do “their bit”. Hopefully the wait will not be too long and a nervous market will soon receive some substantial answers and the Greek Government will produce the required list of reforms.
Since 1st September 2014, the Euro has been devalued by 20%. Although this is seemingly good news for tourism and possible M&As due to the cheaper price of companies, this could create an artificial buzz. Whilst people will go to Europe, US tourists will decrease and companies with interests in the Eurozone will see their assets decrease. It’s a vicious circle which could lead to putting the EU back on the right road at the expense of others, or it may not work at all as it’s too little, too late.
In the UK, the British Chambers of Commerce reported that the UK economy is still on course for strong growth but this could be hampered if we start hiking interest rates too quickly and too aggressively. This is due to the UK’s dependence on consumer spending and mortgages.
Today is a rather empty day newswise but always expect the unexpected!