No sooner than the Eurozone crisis appears to be moving into calmer waters than another shock wave hits. Only a week ago it looked like Merkel and Sarkozy had agreed a deal to buy some time to ultimately solve the Eurozone crisis and now it looks like the
whole thing is going to collapse. I know a week is a long time in politics but this is becoming ridiculous.
The French are concerned about how a continued crisis in Greece will impact the Eurozone and think that there is little choice other than to offer it support. The Germans however, doubt that throwing good money after bad will be anything other than a complete
waste and the rest of the Eurozone States can hardly believe that this second bail out is anything more than a time buying exercise.
No long term solution to the Eurozone crisis was announced and for that reason the markets were not impressed for long, after initial relief of the agreement to a second bail out subsided.
Now the Greeks want a referendum on the terms of the bail out and no one can be in any doubt that the Greek people will say no.
Where does all this leave us?
It looks like Greece will have to leave the Eurozone and ditch the euro. The market has known this for some months and now it is the only logical outcome.
If Italy follows and also leaves the Eurozone, which is looking more likely than ever and the other smaller economic states withdraw, this will obviously have a major impact.
What of those states left in, with interests and stronger economies to maintain? It’s likely that they will be forced into fiscal harmony and have to redefine the charter, drafting new agreements that effectively create a single state. Forget cultures and
sovereignty, as the need to stabilise and create growth momentum and move forward will take precedence.
What of the UK?
Providing the UK moves quickly to build trading agreements with all those leaving the Eurozone and rekindles former trading partnerships, the future could be a good one. A new dawn, in a new world, where trade becomes the prime objective and we consign the
crazy notion of the Eurozone, the single currency and all the red tape and weird Brussels laws to history.
Beware of Greeks bearing gifts! Not necessarily, as they might provide the greatest gift of all, if this finally shows up the folly of the single currency and the autocrats in Brussels.
No doubt the impacts of these issues on
MTF’s and Stock Exchanges will enter into the discussions at the next post-trade forum debate on the 29th November.