A turning point for Greece – but how is the rest of Europe faring?
The recent victory for Greek Prime Minister Alexis Tsipras and his Syriza party for the second time in 2015 may well be a turning point for the demoralised country. The party was just shy of a majority, but was able to form a government with its old ally, the Independent Greek party.
Tsipras resigned in August, in the wake of the resignation of over 30 of his MPs over the confirmation of the bailout terms passed by Greece’s creditors alongside discontent across the country’s population. The re-election of his party should allow the country to move forward in good stead on the reforms that must be introduced as conditions of the most recent bailout from the Troika of the European Commission (EC), the International Monetary Fund (IMF) and the European Central Bank (ECB). The stability of re-election should allow the government to implement all the necessary austerity measures, economic reforms and privatisation, and labour market reform.
The next hurdle for the reformed government will be the mid-October assessment by the creditors of its reform programme, which will allow the remainder of its bailout funds to be released.
Despite this positive news for the future of the Eurozone, this news coincided with the single currency falling back towards previous lows – with the GBP/EUR rate pushing up to 1.38 on Monday from 1.36 on Friday. This weakness of the euro has been attributed to ECB Chief Economist Peter Prae’s reiteration over the weekend that there was a possible case for the Quantitative Easing (QE) programme introduced in March to be extended. Whilst ECB President Mario Draghi confirmed that it was too soon to decide whether or not the QE programme would be extended – and the euro rose accordingly – he did add that he would not hesitate to do so should it be deemed necessary.
As ever, this shows just how volatile the currency market it is – after all, it was only a few weeks ago when investors were flocking to the euro as a safe currency amidst the crash in China, and no doubt the situation will be reversed once again soon enough. If you are looking to send money to Europe now or in the near future, register for an account today to maximise your savings.