Back to Europe and good news all round! The final piece of the ‘Great Greek Escape’ was completed and successful bond sales in Eurozone countries means that today may signal a new beginning.
Greece had to shave €325m worth of expenses which would bring its budget in line with Austerity measures required by the IMF and the European Union. How did a ‘broke’ Greece manage to save €325m in one year? They wiped €100m off the defence ministry, €90m from public sector wages and €135m from operating expenses from the Interior ministry, Labour ministry and Health ministry. With the deal agreed, provided the Finance ministers sign it off on Monday, all will be well in Greece again. The question that still needs to be asked; “If Greece could save all this now, why didn’t they do it from the beginning?” The Greek people have probably been asking that for a while now! The Euro hasn’t been waiting around, with EUR/USD rising sharply from mid-day, where it bounced from the day lows and accelerated towards the 1.31 levels.
Other good European news is that France and Spain put up a fight today as they managed to raise €142bn in a bond sale, which will go a long way in building confidence in the Eurozone and keeping credit rating agencies in check. Momentum appears to be building in the Eurozone, with stable blocks being placed. Eurozone governments will be keen to capitalise on the high demand for their bonds, allowing them to sell off debt and remain within the Austerity measure guidelines.
All looking good in Europe… (JKM)
