All eyes of the world are focused on Greece and the vote to pass the austerity budget or not today. The Eu28bn plan appears to be vital to the future of Greece in its current form if you listen to Christine Lagarde or IMF Chief or EU President Herman Van Rompuy. Of course in a lot of ways they are right but isn’t there a little hint of selfishness in their statements that really suggests a no vote will have more effect on them, their decisions and Europe in general than it actually does in Greece.
The riots and demonstrations on the Streets of Greece will not stop after today’s vote, in fact, if the expected narrow yes vote gets passed then there will be a step up in unrest. And this is the hub of Greek politicians thinking this morning, do they upset the rest of Europe or do they upset their own people? A tough decision for elected individuals to make and who will blame them for being equally as selfish in their decision making as perhaps some others are being in their commentary.
China are becoming more and more important in the whole debt debate and interestingly Chinese Premier Wen Jiabao is in Germany today signing trade deals ten times that of the one signed in the UK and following on from his comments made here on Monday it is highly possible that China want to leverage their strength within the European trade community to increase it’s already large exports through helping the Greek situation?
Not too much data out today which may give Sterling some respite from its recent moves down but there doesn’t appear to be too much on the horizon that will give it a boost in the short term other than further pressure on the Euro. Whilst being beneficial to an export led recovery further weakness of Sterling will begin to have an adverse affect elsewhere so I fully expect 1.10 against the Euro to be its base.
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