Greece is attempting to beat the clock in the acknowledged last hours of solvency with the International Monetary Fund pushing that the European Central Bank should take losses as well as the non-public bond bearers. This basically would comprise that a bond swap giving lower rates of return would be offered. Hopefully with some re assurance that Greece could bring its delinquency to around about 120% of GDP over the next 8 years, which is still plainly big but way better than the prevailing 160%!
Clearly this should be resolved as the last thing Europe wants is another banking crisis followed by a domino effect across Europe which would be terrible for all participants, from fund managers to banks whether they are involved in United Kingdom pensions or QROPS for expats, no one will be excluded.
One of the key hurdles, that is clear, is that again we visit the scenario where different countries desire different things and reaching an understanding that is jointly acceptable between all involved is incredibly difficult, or even impossible in the Euro zones current form! This is the Achilles heel of the Euro zone where the solution is one that’s completely unsatisfactory for most involved and that’s to give up finance controls of each member countries finances and have them controlled from Brussels!
Personally I struggle to see how the leaders of the Euro zone nations, could basically go forward with this. I’m sure that not many would be pleased to give up their own control to Brussels and naturally get it passed their own voters. However this is the circle the EU Union is in and a solution of sorts must be found earlier rather than later on otherwise the whole system will implode on itself!
There is a lot of opposed stories at the moment; however it seems for the near term that stockholders feel that things will change and hopefully for the better. We are able to see this with the Euro being up for the last few days with Gold and the markets broadly speaking.
The following couple of weeks will be very engaging for investors and could potentially be the start of some longer term changes across Europe.
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