Analyst: Greece/Ireland May Leave Euro
source: http://moneynews.com/StreetTalk/euro-ireland-greece/2009/12/11/id/341366
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- rodstradamus
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"The economic crises in Greece and Ireland may necessitate financial bailouts or even an exit from the euro for these countries, according to Standard Bank analyst Steve Barrow.
“Countries like Ireland and Greece may not be able to grow out of the current crisis,” Barrow, head of G-10 currency strategy for the bank, told Bloomberg.
“With interest-rate cuts, exchange-rate depreciation and significant fiscal support all off limits for these countries, bailouts or even pullouts from EMU (European Monetary Union) may happen next year.”
EMU rules limit member countries’ interest rate moves, currency moves and budget deficits.
Ireland and Greece have suffered more from the financial crisis than their neighbors. Ireland’s real estate market collapsed, and its banking system is in tatters after taking on too much risk.
The Irish government estimates that its economy will shrink 7.5 percent this year and 1.25 percent next year.
As for Greece, Fitch Ratings cut its credit rating recently, and Standard & Poor indicated it may soon follow.
Greece is struggling with a massive debt burden. The economy contracted 1.7 percent in the third quarter from a year earlier, and the budget deficit totals 12.7 percent of GDP.
While the government has plans to cut the gap, many analysts are skeptical.
"The likely rise in public debt to more than 120 percent of GDP next year and further to 125 percent in 2011 would leave the public finances highly exposed to shocks," Fitch analysts wrote in a report.
Standard Bank’s Barrow told Bloomberg that the inability to make fiscal transfers within the 16-nation Euro region may do in the currency system.
He said the two countries’ woes will continue to drive the premiums of their bond yields over German bond yields higher.
“That can, in many ways, be a more destructive line of attack for the market than currency pressure,” Barrow says.
Irish and Greek officials deny they will leave the euro."
How can they destroy the American dollar, blend us into a North American Union and establish the Amero as our new currency, when they can't even manage their European Union and Euro dollars? I'm sure George Soros will be first to know if and when they do leave Euro, so he can make billions before everyone else, just like when the British Pound separated from the German Mark. These corporate elites get info first, they manipulate stock markets and control central banks around the world. They'll hold a country for ransom, fund a democratic-socialist coup and rape a country for its resources. Then they'll push a global carbon tax Ponzi scheme under the guise of saving the planet. Its a con.
“Countries like Ireland and Greece may not be able to grow out of the current crisis,” Barrow, head of G-10 currency strategy for the bank, told Bloomberg.
“With interest-rate cuts, exchange-rate depreciation and significant fiscal support all off limits for these countries, bailouts or even pullouts from EMU (European Monetary Union) may happen next year.”
EMU rules limit member countries’ interest rate moves, currency moves and budget deficits.
Ireland and Greece have suffered more from the financial crisis than their neighbors. Ireland’s real estate market collapsed, and its banking system is in tatters after taking on too much risk.
The Irish government estimates that its economy will shrink 7.5 percent this year and 1.25 percent next year.
As for Greece, Fitch Ratings cut its credit rating recently, and Standard & Poor indicated it may soon follow.
Greece is struggling with a massive debt burden. The economy contracted 1.7 percent in the third quarter from a year earlier, and the budget deficit totals 12.7 percent of GDP.
While the government has plans to cut the gap, many analysts are skeptical.
"The likely rise in public debt to more than 120 percent of GDP next year and further to 125 percent in 2011 would leave the public finances highly exposed to shocks," Fitch analysts wrote in a report.
Standard Bank’s Barrow told Bloomberg that the inability to make fiscal transfers within the 16-nation Euro region may do in the currency system.
He said the two countries’ woes will continue to drive the premiums of their bond yields over German bond yields higher.
“That can, in many ways, be a more destructive line of attack for the market than currency pressure,” Barrow says.
Irish and Greek officials deny they will leave the euro."
How can they destroy the American dollar, blend us into a North American Union and establish the Amero as our new currency, when they can't even manage their European Union and Euro dollars? I'm sure George Soros will be first to know if and when they do leave Euro, so he can make billions before everyone else, just like when the British Pound separated from the German Mark. These corporate elites get info first, they manipulate stock markets and control central banks around the world. They'll hold a country for ransom, fund a democratic-socialist coup and rape a country for its resources. Then they'll push a global carbon tax Ponzi scheme under the guise of saving the planet. Its a con.
