14 July 2015, 09:15
For Greece, the choice is a tough one and new elections remain a near-term
risk either called by Prime Minister Tsipras or triggered by the potential
resignation of the pro-European President.
The developments over the past few days have not only come at a high cost to Greece, but also to the euro area. A glance at the front pages of the Monday papers in the euro area tells a depressing story of divide amongst the euro area leaders. As we have highlighted on several occasions, strengthening the institutional framework of the euro area is key for the region's future growth prospects.
"Moreover, while the confidence remains that ECB President Draghi will be able to take sufficient measures to quell significant initial financial contagion, concerns are of the slow moving, but potentially more damaging political contagion", says Societe Generale.
Greece accounts for less than 2% of the euro area GDP and mechanical links between Greece and the rest of Europe are limited. The direct contagion risks are now more contained than at the height of the financial crisis, as the banking linkages with the rest of Europe have collapsed whereas the trade channels are limited (less than 0.2pp of GDP)
The major debt holders are now the official creditors, i.e. the IMF, euro area governments, the EFSF and ECB.
Source : FX-Primus
#FX
#Forex
#SaleForex
#Risk
#EarlyElections
#GreeceElection
#HighCost
#EuroArea
The developments over the past few days have not only come at a high cost to Greece, but also to the euro area. A glance at the front pages of the Monday papers in the euro area tells a depressing story of divide amongst the euro area leaders. As we have highlighted on several occasions, strengthening the institutional framework of the euro area is key for the region's future growth prospects.
"Moreover, while the confidence remains that ECB President Draghi will be able to take sufficient measures to quell significant initial financial contagion, concerns are of the slow moving, but potentially more damaging political contagion", says Societe Generale.
Greece accounts for less than 2% of the euro area GDP and mechanical links between Greece and the rest of Europe are limited. The direct contagion risks are now more contained than at the height of the financial crisis, as the banking linkages with the rest of Europe have collapsed whereas the trade channels are limited (less than 0.2pp of GDP)
The major debt holders are now the official creditors, i.e. the IMF, euro area governments, the EFSF and ECB.
Source : FX-Primus
#FX
#Forex
#SaleForex
#Risk
#EarlyElections
#GreeceElection
#HighCost
#EuroArea
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