Monday, February 9, 2015

G20, EU leaders meet in a week to mend Greece

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Default, devaluation, and exit from the Euro will reverse the 2014 downtrend in Greek stocks rather quickly (chart).  Austerity, regardless of form, will send the economy, stocks, and confidence in the newly elected government to new lows.

Failure to mend Greece, a high probability event without structural reforms that few are ready to champion, means failure of the EU. The invisible hand will 'fix' what the EU leaders cannot mend by forcing an economic solution.  Economic solutions, often painful, drive social and political changes.

Chart


Headline: G20, EU leaders meet in a week to mend Greece

LONDON (Reuters) - Meetings of G20 finance ministers and EU leaders top and tail this week with Greece's fate uppermost in policymakers' minds and global turbulence caused by diverging monetary policies and cheap oil coming a close second.

The central bank world has been upended by a steepling fall in oil prices, and the effect that may have on inflation and growth, and the prospect of the European Central Bank creating 1 trillion euros out of thin air.


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