Technical & Fundamental Oil Reports Specialists

Follow us

A Union divided

Published Tuesday, January 27th, 2015

The QE upper supplied by the ECB did a good job in calming the downer effect of Syriza’s victory judging by yesterday’s trading. Greek bank shares took a big hit and the Athens stock market lost 3.2%, but the euro did not fall out of bed, stock indices closed generally higher and peripheral bond yields held steady.

It is of course very early days. Perhaps investors believe the possibility of a Grexit is merely alarmism or they do not fear the consequences if it does happen. For anyone such as ourselves who feel that the eurozone is built on sand these are very worrying times. A far-left party has been voted into power in Greece which is determined to renegotiate its debt burden and abandon austerity at the same time. If it succeeds it will set the hare running throughout the eurozone.

The puzzle is why Syriza wants to remain within the eurozone, an institution which it claims is responsible for six years of recession and a 25% unemployment level. Is it because there is a no UK  or Swedish type halfway house available to members who exit the eurozone? Or is it because they want the freebees and subsidies without the fiscal discipline? Dark clouds are gathering, the tone is ominous and the mood dangerous. Every new election in the EU now poses a danger to the unity of the eurozone and there are seven more this year including the UK, Finland, Spain, Portugal and Denmark.

to read the rest of the report, please click here

Posted by David Hufton