Broadgate: Market News 13/2
13 February 2012
The main events of the last week were related to negotiations of EU group with Greece representatives about another part of financial aid.
Meanwhile the result of all debates is to postpone all aid. Though the final step should be signing the treaty about national debt relief and receiving new tranche.
The chancellor of Germany Angela Merkel stated that it’s dangerous to let Greece to announce the default as it might lead to negative consequences.
The concerns of Germany are not difficult to understand and are quite obvious. The default might trigger the chain reaction of states leaving the EU and such development of events will completely undermine the already damaged image of the European currency and will put it at the brink of disappearance.
World analytics agree that even if the financial aid is given to Greece that will not save the country from default as Greece will be able to cope neither with reforms nor with economic austerity measures. The situation is critical and its outcome is anticipated very soon.
As for other European news the British monetary policy committee announced the decision to enhance the quantitative easing. And on Friday the rating agency S&P downgraded the ratings of 34 Italian banks to BBB+ with a negative forecast.
Taking to account the aforementioned facts the coming week doesn’t look promising for the Euro.
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