Euro recovers on hopes for Greek bailout plan
After a very difficult few days the euro has risen on currency markets with hopes high that a Greek bailout package will be announced in the next few days. The Greek authorities have already agreed to a number of large investment reductions amid signs that finally the situation may be coming to a head and will be sorted out in the short term.
The main problem is the Greek budget deficit which currently stands at 12.7% of gross domestic product which is more than four times that advised by the EU. However, the authorities have agreed to try to reduce this deficit ratio to 8.7% during 2010. In simple terms we will see a slashing of Greek public-sector spending and an increase in taxes such as VAT. There is no doubt that the Greek public sector is set to enter a very difficult and very demanding phase but ultimately without spending cuts the country would go under.
The very fact that investors have taken heart from moves to reduce the deficit and the likelihood of an EU bailout package has stabilised the Eurozone, at least in the short term. However, while the repercussions of the Greek problem will diminish as it is tackled head-on there are still financial issues to address in Portugal, Spain and Ireland.
Share this..
Related stories
Tesco to close 43 stores
08/01/2015 Supermarket giant Tesco have announced plans to close 43 stores across the UK after its sales fell by 2.9%. They will also be moving their staff headquarters from Cheshunt in Hertfordshire to Welwyn Garden City. The closures will mainly effect local convenience shops, but the supermarket also announced that it would be shelving plans to open a further 49 new, very large stores....
Read MorePoundworld’s “everything £1” claim banned
08/10/2014 Poundworld have been banned from making the “everything £1” claim by the Advertising Standards Authority (ASA), as some items were found to be on sale for as much as £8.99. They have been told that they could eventually be able to make the claim again, but only once they can prove that every item they sell is priced at £1. Chris Edwards Junior, trading director at Poundw...
Read MoreAlastair Darling calls on swift response to Greek problem
Alastair Darling has today demanded that the European Union, IMF and the Greek government get together and finally agree a sustainable bailout package for the Greek economy. The situation has dragged on for weeks now and there are serious concerns that the uncertainty could well spread to other European economies. It is well known that the likes of Ireland and Spain are suffering economic problems...
Read MoreAlistair Darling launches financial market White Paper
The much leaked report on the future of the UK financial markets has today been revealed in depth by the Chancellor Alistair Darling. While the vast majority of the report had been leaked prior to today's announcement there are a couple of elements which have surprised many in the marketplace.
One such surprise has been the government's insistence on a prepaid compensation scheme as...
Scottish economy under pressure
A report from the Strathclyde University has poured scorn on suggestions that the Scottish economy will bounce back quicker than others in the UK. The report suggests that at the very best there will be zero economic growth in 2010 in Scotland and indeed the spectre of a possible return to recession has been mentioned. So why will Scotland lag the rest of the UK?
One of the main iss...