Spanish stand off?
Source: BNY Mellon , Author: Neil Mellor
Posted: Mon June 11, 2012 11:52 am

INTERNATIONAL. In a week in which the Spanish government appeared to raise the ante in its standoff with its EU partners, there was a derived sense, in some quarters at least, that Spain’s gamble might just work.

Unfortunately for Spain, however, there has been no genuine evidence as yet that Germany is at all willing to cede ground in its opposition to direct EFSF funding of the country’s banks, and in fact the same can be said of Germany’s position on a range of issues. Recall, for example, Merkel told her party faithful last Sunday that “under no circumstances” would she agree to German-backed Eurobonds.

However, this is not so say that the week has been devoid of any breakthrough: the FT’s headlines on Thursday suggested that some sort of bailout may yet be extended to the Spanish and extended with such limited conditionality that it would allow the sovereign to accept the deal ‘with honour’.

Whether the story holds water and whether the Spanish would accede to such a plan remains to be seen of course, but then, in view of a more widespread recognition of the fundamental, structural problems afflicting the Euro-area, it is by no means certain that even this action would do anything other than temporarily mitigate market doubts over the region’s stability.

The story may well evolve over the coming week of course, but then, there is also the small matter of next Sunday’s Greek general election looming over the market.

With polls suggesting a neck-and-neck race between Syriza and New Democracy, there is every chance that the outcome will closely resemble its most recent predecessor – resulting in a similar stalemate and a similar debate as to Greece’s future in the Euro-area.

Note: This is the latest Weekly Preview by Neil Mellor,  Currency Strategist at BNY Mellon.

 

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: June 23, 2016
SAUDI ARABIA. The NTP aims to boost non-oil revenue by 2020 through more than 500 initiatives including the implementation of new taxes and increasing government fees and taxes on "harmful products."
date:Posted: June 22, 2016
INTERNATIONAL. 27% believe digitalization is the greatest disruptor to their core business.
date:Posted: June 22, 2016
UAE. A new generation of young, highly motivated and mostly well-educated men and women is ready to take over leadership of their family businesses, according to new Deloitte report.
SAUDI ARABIA. The NTP aims to boost non-oil revenue by 2020 through more than 500 initiatives including the implementation of new taxes and increasing government fees and taxes on "harmful products."
dhgate